AMD report 4th quarter earnings Despite beating Wall Street’s expectations for Tuesday’s sales and earnings, analysts determined sales were down 10% year-over-year for the quarter. The stock rose more than 2% in long-term trading. Here’s how the company performed against Refinitiv’s consensus forecast for the quarter ending December:
- EPS: $0.69 (adjusted), expected $0.67 per share
- Revenue: $5.6 billion, expected $5.5 billion
AMD reported revenue of $5.3 billion for the quarter, just short of Refinitiv’s forecast of $5.47 billion. AMD’s estimates suggest a 10% drop in sales for this quarter. AMD’s sales will grow by 44% in 2022.
The company also said it expected an adjusted gross margin of around 50%, a key metric for chipmakers.
AMD reported earnings, citing declining consumer demand for finished electronics and an overabundance of components needed to build PCs and servers as many of its rival chipmakers stumbled in recent weeks. AMD’s main competitor Intel reported a dismal quarter last week that included a weak outlook for 2023.
The chip makers attributed the strong growth to strong growth in embedded and data center businesses, citing weak customer revenues, namely chips for PCs and laptops, and the gaming segment.
AMD’s data center segment grew 42% year-over-year to $1.7 billion. According to AMD, the embedded segment grew 1,868% on revenue from the Xilinx acquisition.
AMD said sales of PC chips and graphics processors were weak, but its data center segment grew 42% year-over-year, suggesting it took market share from Intel.
However, according to AMD, the customer group, which includes PC processor sales, fell 51% year-over-year due to the downturn in the PC market. The company’s customers have too many of its chips in stock, he added. It’s a theme other semiconductor companies have been referring to in recent weeks. His PC market worldwide is in a prolonged slowdown, according to the estimate.
AMD CEO Lisa Su told analysts that the company expects the overall PC market to decline by about 10% in 2023, calling the PC environment “weak.”
“Despite a mixed demand environment, we are confident that we will capture 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 chips for game consoles, fell 7% year-over-year. The decline was due to graphics cards, offset by “semi-custom” revenue, the way the company reports sales from chips for gaming systems such as his PlayStation 5.
AMD expects the PC chip and graphics processor segments to continue to decline in the quarter, but expects data center and embedded sales to increase.