AMD reported earnings in the first quarter after Tuesday’s call, beating analysts’ estimates of revenue and earnings, which led to a rise in shares of as much as 8% in expanded trading.
Here’s how the chipmaker came up against Refinitiv’s consensus estimates for the quarter ending March:
- EPS: $ 1.13, adjusted, against $ 0.91 expected to be 117% higher than the same period last year
- Revenues: $ 5.89 billion versus expected $ 5.52 billion, up 71% from the same period last 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 show that the chipmaker continues to grow strongly: sales rose 71% in the first quarter, and each of its individual lines of business grew by double digits during the quarter.
Lisa Soo, CEO of AMD
Scott Mill CNBC
One of the highlights for AMD is its high-end server chip business, which primarily competes with Intel. Some data show that AMD has taken market share from its competitor, trying to regain its manufacturing skills.
Some analysts believe that PC sales may decline this year after two years, when supplies have risen sharply as people need laptops to work from home or go to school remotely. Some investors believe the PC pandemic boom is over, but AMD, which supplies the CPU at the heart of many laptops and desktops, is not experiencing a downturn.
“While the PC market is experiencing some softness as a result of several quarters of near-record unit deliveries, we are focusing on premium, gaming and commercial market parts where we see great growth opportunities and expect to continue to share overall customer profits,” said AMD CEO Lisa Soo , adding that AMD believes it has won market share in PC chips for eight consecutive quarters.
PC sales are in the computing and graphics segment of AMD, which grew by 33% year on year and 8% higher than in the December quarter. AMD said the increase was driven by sales of CPUs and GPUs, and that the average sales price of Ryzen processors rose during the quarter.
Sales of cloud servers are in the segment of AMD Embedded, Enterprise and Semi-Custom, which grew by 88% to $ 2.5 billion. AMD said the growth was driven by increased sales of server processors, as well as semi-custom sales, which are chips that are at the heart of game consoles such as the PlayStation 5.
Sue said AMD’s semi-user business has grown by “double digits” on an annualized basis due to consumer demand for Valve’s Playstation 5, Xbox One and Steam Deck.
“Sales of this generation of gaming consoles continue to outpace all previous generations, and we expect 2022 to be a record year for our semi-custom business,” Su said.
In 2022, AMD shares fell more than 39%, after in 2021 their sales grew by 68% and gross profit rose to 48%. Investors are avoiding semiconductor stocks in the face of increased inflation risk.
Last week, Intel gave a disappointing forecast for the June quarter, citing weak demand for PCs and macroeconomic challenges.
AMD said it completed its acquisition of Xilinx in February. The deal was originally announced in 2020 with a price tag of $ 35 billion. AMD said its results include six weeks of revenue from the deal, and that without Xilinx sales revenue would have increased by only 55% over the same period last year to $ 5.3 billion.
AMD said it bought back $ 1.9 billion of its shares during the quarter.
AMD’s profit for the 1st quarter of 2022
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