AMD misses but still ekes out 29% revenue growth
Here’s how the company did:
Earnings: 67 cents per share, adjusted, vs. 68 cents per share as expected by analysts, according to Refinitiv.Revenue: $5.57 billion, vs. $5.62 billion as expected by analysts, according to Refinitiv.
Overall, AMD’s revenue grew by 29% year over year in the quarter that ended on Sept. 24, according to a statement. Net income fell 93% to $66 million.
On Oct. 6, AMD issued preliminary results for the fiscal third quarter that lagged guidance it provided in August, given fewer chip shipments because of a weaker PC market than expected. The stock fell almost 14% in its largest decline in a single trading session since March 2020.
During the quarter AMD announced Ryzen 7000 desktop PC chips for playing video games.
With respect to guidance, AMD said it sees $23.50 billion in full-year revenue, down from the $26.3 billion forecast the company gave in August. Analysts polled by Refinitiv had expected $23.88 billion. The company contracted its adjusted gross margin outlook to 52% from 54% in August.
AMD said its Data Center segment generated $1.61 billion in revenue in the fiscal third quarter, up 45% and slightly below the StreetAccount consensus of $1.64 billion. The unit includes contributions from Xilinx, a maker of chips called field-programmable gate arrays that AMD acquired for about $49 billion in February, and distributed computing startup Pensando, which cost AMD $1.9 billion in an acquisition completed in May.
The Gaming segment produced $1.63 billion in revenue. That was up about 14% and in line with the $1.63 billion consensus among analysts surveyed by StreetAccount.
The Embedded segment that includes some Xilinx sales delivered $1.30 billion, up from $79 million in the year-ago quarter and in line with the $1.30 billion StreetAccount consensus.
AMD’s Client unit, which the chipmaker had warned about in October, came up with $1.02 billion in revenue. That was down nearly 40% but in excess of the $1.17 billion StreetAccount consensus. Four days after AMD gave preliminary results, technology industry researcher Gartner said third-quarter PC shipments fell 19.5%, the steepest decline the company has seen since it started following the market in the mid-1990s.
All four of the segments delivered slightly more revenue than AMD had said to expect in its October warning.
Notwithstanding the after-hours fluctuation, AMD stock has slipped 58% so far this year, while the S&P 500 index is down 19% over the same period.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
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