Chip maker AMD (AMD) posted a better-than-expected 28 percent sales spike to $1.4 billion for Q1 2014 but the vendor recorded a $20 million net loss, or 3 cents per share. The company missed Wall Street’s projections of break-even earnings but bested analysts’ $1.34 billion revenue forecast.

What’s most telling about AMD’s numbers for the period, however, is its performance as a bellwether of video game console sales, particularly as measured by Microsoft’s (MSFT) Xbox platform and Sony’s PlayStation devices. If those manufacturers are talking big sales of gaming systems it’s a good bet AMD’s chip numbers are up.

So while AMD’s PC sales continue to wilt as the desktop market slogs in the mud, its semi-custom system-on-a-chip (SoC) sales have grown, leaving the chip maker more subject to seasonal sales ebbs and flows but supplying it with a market stalwart. For Q1, AMD’s PC business shrunk 12 percent from last year to $663 million, owing to unit shipment slowdowns. The unit posted a $3 million operating loss, a sequential improvement from the $7 million loss the group posted in the prior quarter and a huge advance from the $39 million it lost in the same period last year.

AMD’s Graphics and Visual Solutions sales boomed 118 percent year over year to $734 million, mostly driven by revenue from semi-custom SoCs that produced $91 million in operating income. The amount was a 25 percent dive from the prior quarter but a more than fivefold climb from the $16 million the unit recorded a year earlier. The company credited strong demand for its Radeon R7 and R9 products for the GPU revenue uptick.

"AMD continued our momentum by building on the solid foundation we set in the second half of 2013, further transforming the company," said Rory Read, AMD president and chief executive. "Backed by our powerful x86 processor cores and hands-down best graphics experiences, we achieved 28 percent revenue growth from the year-ago quarter. We are well positioned to continue to grow profitably as we diversify our business and enable our customers to drive change and win."

For Q2, AMD said it expects sales to increase by 3 percent sequentially.

By: DocMemory
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