This past week AMD released their third quarter earnings and it looks like they are back to being a profitable company. These results beat analyst expectations, although their PC business continues to shrink.
In the third quarter of this year AMD posted a net income of $48 million on 1.42 billion of revenue. Compare that to the same quarter last year they posted a loss of $157 million on a $1.27 billion revenue. AMD’s Graphics and Visual Solutions division, which is producing the custom IP for game consoles, saw its revenue go up 96 percent to $671 million. AMD’s Computing Solutions group saw revenue drop 15 percent to $790 million compared to the same quarter last year.
This return to profitability met the projections laid out by AMD’s Rory Read in July as he promised the company would be profitable in the third quarter.
“AMD returned to profitability and generated free cash flow in the third quarter as we continued to successfully execute the strategic transformation plan we outlined a year ago,” Read said in a statement. “We achieved 26 percent sequential revenue growth driven by our semi-custom business and remain committed to generating approximately 50 percent of revenue from high-growth markets over the next two years. Developing industry-leading technology remains at our core, and we are in the middle of a multi-year journey to redefine AMD as a leader across a more diverse set of growth markets.”
While this is a good thing, we are not sure how sustainable it is. They are seeing this increase in profitable business because of the inventory buildup by console makers before their release. AMD needs to really focus on their PC business to continue to remain profitable.
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