AMD's quarterly income hits a seven-year high

Beats expectations thanks to demand for Ryzen processors and Radeon graphics cards

AMD has exceeded analysts' expectations, recording its highest quarterly net income in seven years.

According to Reuters, the chipmaker reported a net income of $116 m (£88.6 m), or 11 cents per share, in the second quarter ended June 30, compared to a loss of $42m (£32 m), or 4 cents per share, in the same quarter a year ago.

The company's revenue also jumped by 53 per cent to $1.76 bn (£1.34 bn) during the three-month period, just topping estimates of $1.72bn.

These figures saw the company's shares soar up five per cent in extended trading, a regular coocurence over the past few years. AMD's shares have more than doubled in the past two years on continued demand for graphics chips used in computers, video game consoles and a variety of other applications.

The firm also recorded some positive results in its graphics and computing business, which makes processors for servers and gaming consoles. Here, sales rose 64 per cent to $1.09bn (£832,000), driven largely by its Ryzen desktop processors and Radeon graphics cards.

It wasn't all positive news, though. This division also saw a decline of three per cent quarter-over-quarter, something AMD says was due to lower revenue from graphics processing units (GPU) in the cryptocurrency market.

Nevertheless, AMD's gross margins also grew by 37 per cent, with its GPU average selling price increasing due to Radeon and sales to data centres.

"We think investors are focused on AMD's gross margin expanding as a measure of success of its new products," said Kevin Cassidy, andlyst at Stifel, who added that the increase in average selling price of GPUs also helped offset fears of weak cryptocurrency-related demand.

On the server side, AMD also saw some growth in its EPYC server processors, which gained market share during a stabilising PC market.