AMD announced profit for the first quarter after the bell on Tuesday, surpassing analysts’ forecasts for profits and earnings, sending shares up 8% in expanded trading.
Here’s how the chipmaker handled Refinitiv’s consensus estimates for the quarter ending March:
- EPS: $ 1.13, adjusted for expected $ 0.91, an increase of 117% on an annual basis
- Income: $ 5.89 billion versus expected $ 5.52 billion, up 71% year-over-year
AMD said it expects $ 6.5 billion in sales this quarter, ahead of analysts’ expectations of $ 6.38 billion.
AMD’s results on Tuesday suggest that the chipmaker is still growing strongly, with 71% sales growth in the first quarter, and each of its individual business lines grew in double digits during the quarter.
Lisa Soo, CEO, AMD
Scott Mill CNBC
One highlight for AMD is its high-end server chip business, which competes primarily with Intel. Some data points show that AMD has taken market share from its competitor as it tries to regain its manufacturing power.
Some analysts have suggested that PC sales could shrink this year after two years when deliveries exploded as people needed laptops to work from home or go to school remotely. Some investors believe that the pandemic boom in computers is over, but AMD, which delivers the CPU to the heart of many laptops and desktops, is not feeling the decline.
“Although the PC market is experiencing some softness coming from several quarters of near-record unit deliveries, our focus remains on first-class, gaming and retail parts of the market, where we see strong growth opportunities and expect to continue to win the overall share of customer revenue, ”said AMD CEO Lisa Soo, adding that AMD believes it has gained market share in computer chips for eight consecutive quarters.
Computer sales are reported in the computer and graphics segment of AMD, which grew by 33% year on year and was 8% higher than in the quarter of December. AMD said the increase was due to both CPUs and GPU sales, and that the average sales price of Ryzen processors rose during the quarter.
Cloud server sales are reported in AMD’s embedded, enterprise and semi-custom segment, which grew 88% to $ 2.5 billion. AMD said the rise was driven by higher sales of server processors, as well as semi-personalized sales, which are chips that are at the heart of game consoles such as the PlayStation 5.
Sue said AMD’s semi-personalized business has grown by “double digits” on an annual basis due to consumer demand for Valve’s Playstation 5, Xbox One and Steam Deck.
“Sales for this generation of gaming consoles continue to outpace all previous generations, and we expect 2022 to be a record year for our semi-personalized business,” Su said.
Shares of AMD had a tough 2022, falling more than 39% so far since the outbreak in 2021, when sales rose 68% and gross margins rose to 48%. Investors are deviating from the shares of semiconductor products in the face of increased inflation risk.
Last week, Intel made a disappointing forecast for the June quarter, citing weak demand for computers and macroeconomic challenges.
AMD said it completed its acquisition of Xilinx in February. The deal was originally announced in 2020 at a cost of $ 35 billion. AMD said its results included six weeks of revenue from the deal and that without Xilinx sales, revenue would have increased by only 55% year-on-year to $ 5.3 billion.
AMD said it bought back $ 1.9 billion of its stock in the quarter.