AMD Q4 2022 Earnings

AMD reported profit for the fourth quarter on Tuesday, beating Wall Street expectations for sales and profit but pointing analysts to a 10% year-over-year sales decline in the current quarter. Shares rose more than 2% in extended trading. Here’s how the company fared against Refinitiv’s consensus estimates for the quarter ending in December:

• EPS: $0.69 adjusted, vs. $0.67 per share expected
• Revenue: $5.6 billion vs. $5.5 billion expected

AMD said it expects $5.3 billion in sales in the current quarter, slightly below Refinitiv’s estimate of $5.47 billion. AMD’s estimate suggests a 10% drop in sales in the current quarter. AMD sales up 44% in 2022

The company also said it expects its adjusted gross margin to be around 50%, a key metric for chipmakers.

AMD posted gains as many of its rival chipmakers stumbled in recent weeks, citing lower consumer demand for finished electronics and a glut of parts needed to make PCs and servers.

IntelAMD’s main competitor, reported a disastrous quarter last week that included a weak outlook for 2023, including a 40% year-over-year sales decline in the March quarter.

The chipmaker attributed its win to strong growth in its embedded systems and data center business and said revenue from customers or chips for PCs and laptops and its gaming segment had declined.

AMD’s data center segment grew 42% year over year to $1.7 billion. Its embedded segment grew 1,868 percent, AMD said, due to sales from the Xilinx purchase.

Although AMD said it was seeing sluggish sales of its PC chips and graphics processors, it said its data center segment grew 42 percent year-on-year, suggesting it has taken market share from Intel.

But its customer group, which includes sales of PC processors, fell 51 percent year over year due to a decline in the PC market, AMD said. He added that his customers have too much inventory of his chips, a theme that other semiconductor companies have raised in recent weeks. The global computer market is in a prolonged slowdown, according to the ratings.

AMD CEO Lisa Su told analysts that the company expects the overall PC market to decline by about 10% in 2023 and said the computing environment is “tough.”

“Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated product portfolio,” Su said in a statement.

AMD’s gaming business, which consists of graphics cards and game console chips, saw a 7% year-over-year decline. The decline came from graphics cards and was offset by “semi-custom” revenue, as the company reports sales of chips for gaming systems like the PlayStation 5.

AMD expects the PC chip and GPU segments to continue to decline in the current quarter, but data center and embedded sales will grow.