AMD reports profit in Q3 after reducing its reliance on PCs

AMD's revenue driven by custom chips for products like Xbox One and PlayStation 4

Reduced reliance on the PC market helped Advanced Micro Devices turn a profit in the third quarter, with the company looking for faster growth in the coming quarters.

The company reported net income of US$48 million for the third quarter ending on Sept. 28, which is an improvement from the loss of $157 million reported in the same quarter last year.

Revenue for the quarter was $1.46 billion, an improvement from revenue of $1.27 billion a year ago. Analysts polled by Thomson Reuters estimated sales of $1.42 billion for the most recent quarter.

Revenue growth was driven by the company's semi-custom chip business unit, which was established earlier this year to make chips for gaming consoles, embedded devices and other non-PC products. AMD's chips will be used in Microsoft's Xbox One and Sony's PlayStation 4, which will ship later this year.

Semi-custom chip business revenue grew by over 26 percent compared to the second quarter of 2013. That business will account for about 50 percent of revenue "from high-growth markets over the next two years," AMD CEO Rory Read said in a statement.

As semi-custom revenue flourished, PC revenue declined. Revenue for the Computing Solutions unit, which deals in PC chips, was $790 million, declining 15 percent year-over-year. The company also recorded growth in revenue from graphics chips.

AMD earlier this year projected it would record a profit in the third quarter. The company "continued to successfully execute the strategic transformation plan we outlined a year ago," Read said.

AMD has been going through years of restructuring under a new management team led by Read. The company laid off 15 percent of its workforce last October, and cut costs by trimming its chip offerings and selling assets. It also forged relationships with more chip manufacturers to cut production overhead.

The company is now expecting a larger chunk of its future revenue to be from its custom chip business as the PC market fades away. AMD has a negligible presence in the tablet market and does not make products for smartphones.

AMD has also been trying to shed its image as an Intel clone. The company licensed the ARM architecture, which it will use in server chips due for shipment to server makers early next year. The company will make processors based on ARM designs for embedded devices as well.

However, the company has not lost sight of the PC market, which remains its bread-and-butter business. Around midyear, AMD started shipping the latest PC chips code-named Kabini, which had a strong ramp up and is selling well, said Dean McCarron, principal analyst at Mercury Research.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesfinancial resultsAdvanced Micro Devices

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?