AMD President and CEO Lisa Su speaks at an AMD event at CES in Las Vegas on January 6, 2020.
Bridget Bennett | Bloomberg | Getty Images
Advanced micro-devices shares rose as much as 3% in extended trading on Tuesday after the chipmaker announced earnings and quarterly guidance that fell short of Wall Street’s expectations
This is how the company did it:
- Income: 67 cents per share, adjusted, versus 68 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $5.57 billion, versus $5.62 billion as expected by analysts, according to Refinitiv.
Overall, AMD’s revenue grew 29% year-over-year in its fiscal third quarter, which ended Sept. 24, according to a statement. Net profit fell 93% to $66 million, primarily due to AMD’s February $49 billion acquisition of Xilinx, a maker of chips called field-programmable gate arrays.
On October 6, AMD released preliminary results for its fiscal third quarter that fell short of expectations it had provided in August, given fewer chip shipments due to a weaker-than-expected PC market. The stock fell nearly 14% in its biggest single trading session decline since March 2020.
Regarding the guidance, AMD said it sees full-year revenue of $23.50 billion, down from the $26.3 billion forecast the company gave in August. Analysts consulted by Refinitiv had expected $23.88 billion. The company lowered its adjusted gross margin forecast from 54% in August to 52%.
AMD said the data center segment generated $1.61 billion in revenue in its fiscal third quarter, up 45% and slightly below the StreetAccount consensus of $1.64 billion. The unit includes contributions from Xilinx and distributed computing startup Pensando, which cost AMD $1.9 billion in an acquisition completed in May.
The chipmaker sees a healthy demand for shipments of its server chips codenamed Genoa. AMD plans to launch Epyc data center chips on November 10.
AMD CEO Lisa Su said cloud revenues more than doubled and increased sequentially, while revenues from server makers targeting large enterprises declined sequentially.
Some companies have slowed their purchases due to macroeconomic uncertainty, she said.
The data center business “looks good at least for now and a lot better than what’s going on right now” IntelStacy Rasgon, senior semiconductor analyst at Bernstein, said in an interview on CNBC’s “Closing Bell: Overtime” after AMD announced the results. “There’s a lot of uncertainty about what they’re going to say about the data center, especially in the wake of Intel’s report. in which Intel had called for a market decline in the fourth quarter. This is probably why the stock is going up now. The guide itself is pretty weak, but it seems likely it’s isolated to PCs.”
The gaming segment produced $1.63 billion in revenue. That was about 14% more and in line with the $1.63 billion consensus among analysts polled by StreetAccount. The company praised healthy demand for console chips as the holiday season approaches Microsoft and Sony.
The Embedded segment, which includes some Xilinx sales, brought in $1.30 billion, up $79 million in the year-ago quarter and in line with the StreetAccount consensus of $1.30 billion.
AMD’s Client unit, which the chipmaker warned about in October, had a turnover of $1.02 billion. That was nearly 40% less, but more than the $1.17 billion StreetAccount consensus. Four days after AMD released preliminary results, technology industry researcher Gartner said PC shipments fell 19.5% in the third quarter, the sharpest drop the company has seen since the mid-1990s. the market began to follow. During the quarter, AMD announced Ryzen 7000 desktop PC chips, and AMD pointed to positive reviews of the products.
All four segments delivered slightly more revenue than AMD expected in its October warning.
Despite the after-hours fluctuation, AMD stock is down 58% so far this year, while the S&P 500 index is down 19% over the same period.
Executives will discuss the results with analysts during a conference call beginning at 5 p.m. ET.
This is the latest news. Come back for updates.
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