AMD Ryzen Debut Doesn’t Mask Soft Q1 Radeon GPU Sales On Earnings Though Vega On Track For Q2
Advanced Micro Devices (AMD) posted a loss of $73 million, or $0.08 per share, on revenue of $984 million in the first quarter of 2017, the chip designer announced. The loss might have been higher if not for the launch of AMD's Ryzen processors, which the company credited with its year-on-year revenue growth. However, sales of its graphics processors, and in particular custom GPUs for consoles, fell flat.
"We achieved 18 percent year-over-year revenue growth driven by strong demand for our high performance Ryzen CPUs as well as graphics processors," said Dr. Lisa Su, AMD president and CEO. "We are positioned for solid revenue growth and margin expansion opportunities across the business in the year ahead as we bring innovation, performance, and choice to an expanding set of markets."
AMD's discrete graphics business rose just 1 percent sequentially to $593 million. The numbers look a bit better on a year-over-year basis in which AMD's graphics segment rose 29 percent, though the division posted an operating loss of $15 million.
As for AMD's custom GPUs, the segment that mainly reflects the supply of graphics hardware for PlayStation 4 and Xbox One consoles, the results were also mixed. Revenue in this segment was up 5 percent year-over-year to $391 million, though down 23 percent sequentially. AMD shrugged off the sequential decline as being seasonally typical for the first quarter.
The good news for AMD is that it is in good shape going forward. Ryzen has made the company competitive with Intel again in the enthusiast market. On top of that, AMD has fleshed out its Ryzen lineup with affordable mainstream options as part of its Ryzen 5 series starting at $169.
AMD is also set to launch its highly anticipated Vega GPU architecture in the current quarter. The company notes that Vega has been designed from scratch to address next generation workloads. At present, AMD does not have anything to compete with NVIDIA's Pascal architecture at the high-end, but Vega is expected to change that. If and when it does, AMD will have competitive options for enthusiasts in both CPU and GPU markets.
Though the outlook is bright, investors seem skeptical based on AMD's stock price. Shares of AMD fell about 15 percent through Tuesday's pre-market trading and dropped more than 19 percent after the opening bell.
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