AMD Chairman and CEO Lisa Su speaks during AMD’s keynote at the Consumer Electronics Show (CES) on January 4, 2023 in Las Vegas, Nevada.
Robin Beck | AFP | Getty Images
AMD It reported fourth-quarter earnings on Tuesday, beating Wall Street’s expectations for sales and profit, but led analysts to report a 10% year-over-year sales decline in the current quarter. The stock rose more than 3 percent in extended trading. Here’s how the company fared on Refinitiv Consensus estimates for the December quarter:
- EPS: $0.69, adjusted, expected at $0.67 per share
- Revenue: $5.6 billion, compared to $5.5 billion
AMD said it expects sales of $5.3 billion in the current quarter, slightly lower than Refinitiv’s estimate of $5.47 billion. AMD estimates a 10% drop in sales for the current quarter. AMD sales up 44% in 2022
The company said it expects adjusted gross margin to be about 50%, a key metric for chipmakers.
AMD reported earnings as many of its rival chipmakers stumbled in recent weeks. Intel, AMD’s primary competitor, reported a dismal quarter that included a weak 2023 outlook.
The chipmaker attributed the beat to strong growth in its embedded and data center businesses, saying its customer revenue or chips for PCs and laptops and its gaming segment declined.
AMD’s data center division grew 42 percent year-over-year to $1.7 billion. Its included segment grew by 1,868%, AMD, because of the Xilinx acquisition sales.
While AMD said it saw slower sales of PC chips and graphics processors, its data center segment rose 42 percent year over year, suggesting it has taken market share from Intel.
But the customer group, which includes sales of PC processors, fell 51% year-over-year due to a shrinking PC market, AMD said. He added that customers are stockpiling chips, a theme that other semiconductor companies have mentioned in recent weeks. According to estimates, the global PC market is in for a prolonged slowdown.
AMD CEO Lisa Su called the PC environment “weak” in a statement.
“Despite the mixed demand environment, we are confident in our ability to gain 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 includes graphics cards and chips for game consoles, fell 7 percent year over year. The decline came from graphics cards and adjusted for “semi-custom” revenue, which the company reports on sales of chips for gaming systems like the PlayStation 5.
AMD expects units with PC chips and graphics processors to continue to decline in the current quarter, but data center and embedded sales will grow.
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