We opined that AMD's last quarterly earnings represented the calm before the 7nm storm, and today that storm made landfall as AMD posted its highest quarterly revenue since 2005 driven by its highest quarterly revenue for client (desktop) PC chips since 2011. Overall, AMD posted $1.8 billion in revenue for its third quarter 2019, a 9% year-over-year and 18% quarterly gain.

(Image credit: Tom's Hardware)

AMD's success in the client desktop segment came as a byproduct of burgeoning sales of its 7nm Ryzen 3000 processors that experienced so much demand the company had difficulties keeping shelves stocked with the most popular models. The strong sales drove AMD's client division to a healthy 36% year-over-year (YoY) increase in revenue, but lingering shortages may have constrained potential growth. AMD's Ryzen processors now command the pricing we'd expect of premium processors, leading to an increase in average selling prices (ASP). AMD also says that it gained more desktop market share during the quarter, marking the eighth straight quarterly increase.

AMD's hotly-anticipated 7nm EPYC Rome processors also finally began shipping in volume, leading to a 50% quarterly increase in EPYC sales. However, lower sales in the company's custom silicon business (i.e., consoles) dragged down sales for the Enterprise, Embedded and Semi-Custom group, masking some of the gains from data center processor sales. Overall, the segment was down 27% YoY and 11% QoQ.

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AMD's GPU business is also doing well with the arrival of 7nm Radeon graphics cards that helped fuel a year-over-year rise in average selling prices (ASPs), but AMD chalked up a quarterly decline in GPU ASPs to a higher proportion of mobile sales. AMD disclosed that its data center GPU sales declined, but didn't elaborate.

AMD's gross margins also improved to 43%, a 3% YoY gain that were the best since 2012. Profits weighed in at $121 million, an increase of 242%.

AMD also plans for more explosive gains in the coming quarter, projecting $2.1 billion in revenue, which would represent a 48% YoY and 17% quarterly gain. If AMD can deliver on those projections, it would equate to the highest quarterly revenue in the company's history. AMD also noted that it has reduced debt by $441 million this year.