Lisa Su, president and chief government officer of Advanced Micro Devices Inc. (AMD), presents the AMD Ryzen 4000 sequence chip throughout an AMD press occasion at CES 2020 in Las Vegas, Nevada, U.S., on Monday, Jan. 6, 2020.
Bridget Bennett | Bloomberg | Getty Images
AMD reported third-quarter earnings after the bell on Tuesday, with earnings and income beating analyst expectations, and a powerful forecast for the fourth quarter.
The inventory was up as a lot as 1% in prolonged buying and selling.
Here’s how the chipmaker did in opposition to Refinitiv consensus estimates for the quarter ending Oct. 2:
- EPS: $0.73, adjusted, versus $0.67 anticipated, up 16% year-over-year.
- Revenue: $4.31 billion, versus $4.12 billion anticipated, up 54% year-over-year
AMD mentioned it anticipated $4.5 billion in gross sales within the fourth quarter, forward of analyst expectations of about $4.25 billion in gross sales within the quarter. AMD is forecasting 39% annual progress within the fourth quarter.
AMD is likely one of the firms that has benefitted probably the most from the surge in electronics gross sales over the previous 18 months as its central processors and graphics processors energy PCs, servers and recreation consoles. Those gross sales are logged in AMD’s computing and graphics section, which reported $2.4 billion in income, up 44% year-over-year.
The PC market has slowed from its torrid tempo a yr in the past when individuals world wide nonetheless wanted computer systems to work or study from dwelling, however AMD mentioned its chips had been promoting at larger common costs as prospects go for extra highly effective processors.
AMD stories server chip and console chip gross sales in its Embedded, Enterprise, and Semi-custom section. AMD reported $1.9 billion in gross sales on this vital class, up 69% year-over-year pushed by Epyc server chips, and better “semi-custom” gross sales, that are the semiconductors it sells to recreation console makers.
AMD is within the technique of taking market share within the server market behind its Epyc processors, as giants like Microsoft and Google buy its chips to run their cloud providers. AMD CEO Lisa Su mentioned in a statment that information heart gross sales doubled year-over-year and now represents “mid-20s” of total AMD income.
Meanwhile, recreation consoles, like Sony’s Playstation 5 and new Microsoft Xbox fashions, stay in excessive demand and onerous to search out as they promote out rapidly. Likewise, AMD’s graphics and central processors are onerous to search out in inventory in shops.
“Semi-custom revenue grew sequentially and year-over-year as demand for the latest Microsoft and Sony consoles remains very strong,” Su mentioned on a name with analysts on Tuesday. “We expect semi-custom revenue to increase sequentially in the fourth quarter as we further ramp supply to address the ongoing game console demand.”
AMD is a fabless chip firm. It designs the know-how inside its semiconductors and outsources manufacturing to foundry companions like TSMC and GlobalFoundries. In September, AMD CEO Su mentioned she expects the chip scarcity to turn into much less extreme in 2022.
AMD continues to maintain its prices underneath management and enhance its profitability. It mentioned its gross margin was 48%, up from 44% in the identical interval final yr as a result of prospects are shopping for costlier processors. It forecast gross margins at 49.5% within the fourth quarter. AMD’s web revenue for the quarter was $893 million.
Last October, AMD introduced its plans to purchase Xilinix in a deal price $35 billion that will give the corporate extra firepower to compete with Intel within the information heart chip market. AMD mentioned the deal was nonetheless on observe to shut by the top of 2022 and the corporate is making “good progress” to securing regulatory approvals.
AMD mentioned it repurchased $750 million in shares in the course of the quarter. AMD inventory is up over 30% yr so far.