AMD’s Q2 2021 income grew 99% to $3.85B on industry share gains

Advanced Micro Devices reported its revenues and earnings for the second quarter ended June 30 exceeded expectations with income developing 99% to $3.85 billion.

Non-GAAP net earnings for the quarter was $778 million, or 63 cents a share, beating expectations of 54 cents a share on a non-GAAP basis. AMD mentioned it was rising its annual earnings forecast and its shares are up 1% to $91.93 a share in immediately after-hours trading.

The Santa Clara, California-based enterprise has had a great run on momentum behind its Zen and Zen 2 architectures for processors, which can create 50% or more far better functionality per clock cycle than the preceding generation. This architecture place AMD ahead of Intel in functionality for the initial time in a decade and it has helped the perennial No. 2 Computer chip maker into a quickly-developing contender against Intel.

Intel, meanwhile, has had stumbles not only on the chip design and style side but also in manufacturing, exactly where it has lost its technological benefit to rivals such as TSMC, which tends to make each processors and graphics chips for AMD. As a outcome, AMD has been creating historic industry share gains for the previous 3 years. What’s fascinating is AMD has been creating these gains amid a historic chip shortage driven by the provide whipsaw from the pandemic and unprecedented demand for electronic goods.

“Our business performed exceptionally well in the second quarter as revenue and operating margin doubled and profitability more than tripled year-over-year,” mentioned AMD Lisa Su, in a statement. “We are growing significantly faster than the market with strong demand across all of our businesses. We now expect our 2021 annual revenue to grow by approximately 60% year-over-year driven by strong execution and increased customer preference for our leadership products.”

Intel, meanwhile, is doubling down on its manufacturing investments as a way to remain competitive and take benefit of the chip boom and provide shortage.

Q2 2021 benefits

As noted, income was $3.85 billion, up 99% year-more than-year and 12% quarter-more than-quarter. That was driven by larger income in each the computing and graphics segment, as properly as development in the enterprise, embedded, and semi-custom segments. Analysts had anticipated revenues of $3.62 billion.

The gross profit margin was 48%, up 4 percentage points year-more than-year and 2 percentage points quarter-more than-quarter. The increases have been driven by a richer mix of sales, such as higher-finish Ryzen, Radeon, and Epyc processor sales. That implies AMD is carrying out properly across the board.

Non-GAAP net earnings was $778 million compared to $216 million a year ago and $642 million in the prior quarter. Non-GAAP diluted earnings per share was 63 cents compared to 18 cents a year ago and 52 cents in the prior quarter.

AMD now has $3.79 billion in money, money equivalents and quick-term investments. Cash is coming into the enterprise at a price of $952 million per quarter, compared to $243 million a year ago and $898 million in the prior quarter.

Quarterly economic segment summary

Computing and graphics segment income was $2.25 billion, up 65% year-more than-year and 7% quarter-more than-quarter driven by larger client and graphics processor sales. Client processor typical promoting value (ASP) grew year-more than-year and quarter-more than-quarter driven by a richer mix of Ryzen desktop and notebook processor sales. It was the fifth straight quarter of record processor income.

Graphics processing unit (GPU) ASP grew year-more than-year and quarter-more than-quarter driven by higher-finish graphics item sales, such as information center GPU sales. Operating earnings was $526 million compared to $200 million a year ago and $485 million in the prior quarter. The increases have been mainly driven by larger income.

Enterprise, embedded and semi-custom segment income was $1.6 billion, up 183% year-more than-year and 19% quarter-more than-quarter. The increases have been driven by larger Epyc processor income and semi-custom item sales. The semi-custom merchandise involve processors for the PlayStation 5 and Xbox Series X/S game consoles.

Current outlook

For the third quarter of 2021, AMD expects income to be about $4.1 billion, plus or minus $one hundred million, an raise of about 46% year-more than-year and about 6% quarter-more than-quarter. The year-more than-year raise is anticipated to be driven by development across all organizations. The quarter-more than-quarter raise is anticipated to be mainly driven by development in AMD’s datacenter and gaming organizations. AMD expects non-GAAP gross margin to be about 48% in the third quarter of 2021.

For the complete year 2021, AMD now expects income development of about 60%, up from prior guidance of about 50%, driven by sturdy development across all organizations. AMD now expects non-GAAP gross margin to be about 48% for the complete year 2021, up from prior guidance of 47%.

Originally appeared on: TheSpuzz