Advanced Microphone Device Shares jumped as much as 6% in extended trading Tuesday after the chipmaker said it was looking to its server chip business to grow in the coming quarters, even as earnings and direction Quarterly leads fell short of Wall Street expectations.
Here’s how the company did it:
- Income: 67 cents/share, adjusted, compared with 68 cents/share as analysts expected, according to Refinitiv.
- Turnover: According to Refinitiv, $5.57 billion, compared with $5.62 billion as predicted by analysts.
Overall, AMD’s revenue grew 29% year-over-year in its third fiscal quarter, which ended September 24, according to a report. statement. Net income fell 93% to $66 million, largely due to AMD’s $49 billion acquisition of Xilinx in February, a chipmaker known as field-programmable gate arrays.
On October 6th, AMD promulgating preliminary results for the third fiscal quarter has been slow to guide it Offered in August, with fewer chip shipments due to a weaker-than-expected PC market. Shares fell nearly 14% in their biggest single-day drop since March 2020. AMD braced for a lackluster PC market in the fourth quarter, AMD CEO Lisa Su said in an interview. meeting with analysts.
In terms of guidance, AMD said it posted revenue of $23.50 billion for the full year, down from the $26.3 billion forecast the company made in August. Analysts polled by Refinitiv had expected $23.88 billion. The company signed a revised gross margin outlook from 54% in August to 52%.
AMD says its Data Center business generated $1.61 billion in revenue in its fiscal third quarter, up 45 percent and slightly below the StreetAccount consensus of $1.64 billion. The unit includes contributions from Xilinx and distributed computing startup Pensando, costing AMD $1.9 billion in an acquisition completed in May.
The chipmaker has seen good demand for its server chip shipments, code-named Genoa. AMD is scheduled to launch its Epyc data center chip on November 10.
“We’ve made very good progress at the North American cloud providers and we continue to believe that while there may be some short-lived, let’s call it optimization, let’s call it optimization.” call it individual footprint and efficiency at individual cloud providers, mid-term,” said Su. “As we head into 2023, we expect to see growth in that market, especially is the customer moving more workloads to AMD, relying solely on the strength of our product portfolio and overall going forward.
Su said cloud revenue more than doubled and steadily increased, while revenue from server manufacturers targeting large companies has steadily declined. She said AMD has seen enterprise customers take longer to make decisions and be a little more cautious in capital spending.
The data center business “at least for now, looks pretty good and a little better than what’s going on with Intel“, Stacy Rasgon, senior semiconductor analyst at Bernstein, said in an interview on CNBC’s “Closing Bell: Working Hours” after AMD released the results. Intel called the market down in Q4. This is probably why the stock is bullish. The guidance itself is pretty weak, but it looks like it’s isolated to PCs.”
The games segment generated $1.63 billion in revenue. That’s up about 14% and is in line with the $1.63 billion consensus among analysts surveyed by StreetAccount. Company touts healthy demand for panel chips as holiday approaches for Microsoft and Sony.
The Embedded segment includes some Xilinx sales that hit $1.30 billion, up from $79 million in the previous quarter and in line with the $1.30 billion StreetAccount consensus.
AMD’s Customer unit, which the chipmaker warned about in October, hit $1.02 billion in revenue. That number is down nearly 40% but exceeds the StreetAccount consensus by $1.17 billion. Four days after AMD released preliminary results, industry researcher Gartner speak PC shipments in the third quarter fell 19.5%, the steepest decline the company has seen since its inception in the mid-1990s. During the quarter AMD announced Desktop chips Ryzen 7000 and AMD have shown rave reviews of the product.
AMD “worked closely with our customers to reduce inventory downstream,” said Su.
All four segments brought in slightly more revenue than AMD expected in its October warning.
“We will continue to invest in our strategic priorities around the data center, embedded and commercial markets, while tightening costs for the rest of the business,” said Su. The company will control operating costs and grow headcount, said Devinder Kumar, AMD’s chief financial officer.
Despite the after-hours volatility, AMD stock is down 58% so far this year, while the S&P 500 is down 19% year-over-year.