The strong market performance of Ryzen and Epyc processors are seen as the main driver of AMD first quarter earnings.
AMD reported its first quarterly earnings revealing an impressive growth compared to last year. The continued demand for Ryzen and Epyc processors help AMD improve its current market standing.
According to AMD, the company controls more than 50% of the premium CPU market as reported by a number of retailers. Market reports coming from Amazon and Newegg can back AMD’s claim. Best-selling lists from the two retailers will reveal that AMD does 50% or more of the best-selling processors.
Impressive quarterly performance
For the first quarter of the year, AMD posted $1.78 billion in revenue. That represents an improvement of 40% compared to the same quarter last year. This is also the company’s best quarter in the last 10 years.
— AMD News (@AMDNews) April 29, 2020
This boost in revenue means that AMD’s net income also improved. The company reported $164 million in net income. As for its gross margins, the company reached 46%, which is a five point boost compared to last year’s performance.
Bringing in majority of the earnings is the AMD’s flagship Computing and Graphics segment. This segment of AMD’s operation covers all its desktop, notebook CPU, and graphics card sales.
The Computing and Graphics segment posted $1.44 billion in revenue for the first quarter alone. As expected, the division’s operating income went up to $262 million.
AMD is on a positive note, despite the current coronavirus pandemic. The company’s second-quarterly forecast is $1.85 billion. For the entire year, the company is expecting its revenue to grow by about 25 percent compared to its numbers last year.
PC market is slowing down
Despite AMD’s impressive market performance, there is a growing concern that the PC market is slowing down. It is important to note that AMD’s major market is PC.
The PC market is expected to experience a slowdown because of the current coronavirus pandemic. China, one of AMD’s biggest markets, is in lockdown because of the pandemic. As such many retailers that sell AMD products are closed.
Despite this forecasts AMD chief executive Lisa Su remains optimistic saying:
“Two forces are there. One is, there is a pull, with strong work from home trend, and there’s also the view that from a macro standpoint, we’ll be weaker in the second half of the year.”
In preparation of the latter part of the year, AMD is scheduled to release its Zen 3 processors and RDNA2 graphics cards later this year. The company said that it is still on track for its release timetable.
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