AMD published its third quarter financial results on Tuesday, meeting market expectations and posting its highest quarterly sales figures since 2005. The numbers come after AMD's first full quarter of 7nm Ryzen, Radeon and Epyc processor sales. Shares were down in after-hours trading on a somewhat weak Q4 outlook.
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Non-GAAP net income was $219 million, and earnings per share came to 18 cents. Revenue was $1.8 billion, up 9 percent year-over-year and 18 percent quarter-over-quarter.
Wall Street was looking for earnings of 18 cents a share on revenue of $1.81 billion.
"I am extremely pleased with our progress as we have the strongest product portfolio in our history, significant customer momentum and a leadership product roadmap for 2020 and beyond," President and CEO Lisa Su said in a statement.
Computing and Graphics segment revenue was $1.28 billion, up 36 percent year-over-year and sequentially. The higher revenue was primarily driven by increased Ryzen client processor sales, AMD said.
"We saw particularly strong demand for our top-end Ryzen processors and believe we gained client processor unit share for the eighth straight quarter," Su said in prepared remarks for Tuesday's analyst conference call.
In desktop, Su said AMD is seeing strong demand for the Ryzen 3000 and previous generation Ryzen 2000 processors. "Both product families are consistently among the top sellers at leading etailers and retailers globally," she said.
Enterprise, Embedded and Semi-Custom segment revenue was $525 million, down 27 percent year-over-year and 11 percent sequentially. The decreases were primarily due to lower semi-custom product revenue. AMD expects semi-custom demand to further soften in the fourth quarter, now that both Microsoft and Sony have announced new AMD-powered consoles for holiday 2020, Su said.
The lower semi-custom product revenue was partially offset by higher Epyc processor sales. After launching its second generation Epyc processor in August, Epyc revenue and unit shipments grew more than 50 percent sequentially, AMD noted. Customers of the 2nd Gen chip include Google, Amazon AWS, IBM Cloud, Microsoft Azure, OVHcloud, Twitter and Tencent. Meanwhile, Dell, HPE and Lenovo more than doubled their server portfolio with 2nd Gen Epyc processor platforms.
For the fourth quarter of 2019, AMD expects revenue to be approximately $2.1 billion, plus or minus $50 million, an increase of about 48 percent year-over-year.
Analysts are expecting Q4 earnings of 31 cents revenue of $2.15 billion.