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AMD stock falls 22% on back of missed Q3 targets, disappointing Q4 outlook

By midian182 · 7 replies
Oct 25, 2018
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  1. Thanks to the continuing popularity of its Ryzen and Epyc processors, AMD’s revenue hit $1.65 billion in Q3 2018—up from $1.58 billion in Q3 2017. But this figure was less than the $1.76 billion it brought in last quarter, and around $50 million lower than what analysts predicted. Net income, meanwhile, hit $102 million, beating last year’s $61 million figure but down from the $116 million it made in Q2 2018. Gross margin for the quarter was 40 percent.

    “We delivered our fifth straight quarter of year-over-year revenue and net income growth driven largely by the accelerated adoption of our Ryzen, Epyc and data center graphics products,” said CEO Lisa Su. “Client and server processor sales increased significantly although graphics channel sales were lower in the quarter. Looking forward, we believe we are well positioned for further market share gains as we continue making significant progress towards our long-term financial targets.”

    The company’s GPU sales saw slower than expected growth, partly because of their inability to compete against Nvidia’s products, and partly due to the shrinking cryptocurrency market. AMD’s cards had been popular among cryptominers, but the falling price of digital currencies has seen demand drop in recent months. "Blockchain-related GPU sales in the third quarter were negligible," said the firm, while back in Q3 2017, these cards made up a "high single digit percentage of total AMD revenue."

    AMD’s net revenue from its Computing and Graphics segment was $938 million in Q3, while analysts had forecast $1.05 billion.

    Despite the results, some experts are optimistic about AMD's future. “I wasn’t expecting much from the graphics division in the quarter anyway,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. “I am not expecting any major change in GPU market dynamics until the seven-nanometer Navi launches, which I believe will improve its position, particularly in the enterprise market.”

    Su said graphic sales were expected to be up in Q4, but investors are concerned that the overall guidance for the final quarter of the year is weak. AMD estimates fourth-quarter revenue of $1.4 billion to $1.5 billion, below Wall Street’s forecast of $1.6 billion.

    AMD stock fell 22.55 percent to $17.65 a share in after-hours trading following the report.

    Main image credit: Shutterstock / michelmond

    Permalink to story.

  2. Buy the dip.
  3. alabama man

    alabama man TS Guru Posts: 563   +355

    Good, hope this means they make their next GPU available for normal consumers.
    Stark likes this.
  4. mrjgriffin

    mrjgriffin TS Evangelist Posts: 349   +163

    Hey amd, make a worthwhile competing graphics card so I can get rid of the garbage shadowplay telemetry that breaks geforce experience/shadowplay if u remove it. I'd like to use a game dvdr software that doesn't have built in telemetry. amd is nice enough to not include that bullhonkey. nvidia doesnt care because they own the market share when it comes to desktop and laptop graphics. microsoft built in game dvr is extremely lacking in features compared to shadowplay. I want nvidia off of my system. they're a garbage company. the green team hasn't even updated their nvidia control panel in over a decade lol. not like thats a huge deal or anything but nvidia is just trash. amd needs to get the ball rolling, they're the team who actually gives a **** about the consumer, not nvidia or intel.
    BMAN61 likes this.
  5. Evernessince

    Evernessince TS Evangelist Posts: 4,098   +3,655

    Just to clarify, AMD's quarter was only disappointing to some analyst's predictions. Otherwise they had continuous growth quarter over quarter.
    BMAN61, Reehahs and Lounds like this.
  6. hahahanoobs

    hahahanoobs TS Evangelist Posts: 2,591   +933

    This should humble AMD and force them to focus on the masses instead of the 20%. They have no laptop market, and Intel is keeping AMD at bay with 14nm.

    Ryzen 2 HAS to be freaking amazing and so does Navi. Being good enough isn't good enough. Numbers don't lie. Period.

    If Ryzen 2 is faster than Intel 10nm, I'll buy it, but his waiting game is testing my patience.
    Sausagemeat and Stark like this.
  7. Adi6293

    Adi6293 TS Maniac Posts: 245   +218

    Don't know what gpu you have but you can find good deal for Vega 56 and Vega 64 right now :)
  8. LeroN

    LeroN TS Enthusiast Posts: 87   +28

    It is natural. Do not try to play games on par with Nvidia.

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