Advanced Micro Devices delivered a first quarter profit in the latest sign that the PC and server upgrade cycle is gaining momentum.
AMD delivered net income of $257 million, or 35 cents a share on revenue of $1.57 billion, up from $1.18 billion a year ago (statement). AMD's revenue was down a bit from the $1.65 billion delivered in the fourth quarter. On a non-GAAP basis the chip maker reported a profit of 9 cents a share.
Wall Street was expecting AMD to report a loss of 5 cents a share. In a statement, AMD CEO Dirk Meyer credited new graphic and server chips for boosting the company's prospects.
The company said gross margin was 47 percent in the first quarter. Excluding an inventory adjustment related to the GlobalFoundries spin-off---AMD's former manufacturing operations---the company reported gross margins of 43 percent.
For comparison, Intel's margins are 63.4 percent.
By business unit, AMD's computing solutions division---desktop, server and notebook processors saw revenue jump 23 percent from a year ago. Graphics chip revenue was up 88 percent in the first quarter from a year ago. Simply put, strong PC sales are lifting all boats.
As for the outlook, AMD expects revenue to be down in the second quarter, in line with the usual seasonal trend.