AMD announced revenue and earnings for the first quarter that surpassed expectations, but the stock experienced a 6% decline in extended trading on Tuesday, 2nd May. This occurred as the chipmaker provided guidance for the current period that fell short of analysts' estimates.
Based on Refinitiv consensus estimates for the quarter ending in December, here is a comparison of the company's performance:
– Adjusted EPS: 60 cents per share, surpassing the expected 56 cents per share.
– Revenue: $5.35 billion, surpassing the expected $5.3 billion.
AMD projected sales of approximately $5.3 billion for the current quarter, falling short of Wall Street estimates of $5.48 billion. AMD CEO Lisa Su mentioned in a statement that the company anticipates growth in the second half of the year as the PC and server markets strengthen.
The company recorded a net loss of $139 million, equivalent to 9 cents per share, compared to a net income of $786 million, or 56 cents per share, in the same period the previous year. AMD's earnings exclude specific losses on investments and costs related to acquisitions.
Furthermore, the company's revenue experienced a 9% decline from $5.89 billion in the corresponding period last year.
The biggest decrease occurred in AMD's client group, which includes PC processor sales. Sales in this category amounted to $739 million, marking a 65% drop compared to $2.1 billion in sales during the same period last year.
AMD's recent report coincides with a significant decline in the PC industry, with shipments plunging by 30% in the first quarter as per IDC. In a similar vein, Intel, AMD's main rival in the PC and server chip markets, reported a 36% decrease in overall sales just last week.
AMD's data center segment sales showed a slight increase, rising from $1.293 billion in the year-earlier period to $1.295 billion. The company stated that it expects this category to experience growth in the current quarter.
“We believe the first quarter was the bottom for our client processor business, “I would say from an overall market standpoint, I think enterprise will still be mixed, with the notion that we expect some improvement. Depends a little on the macro situation” Su Said
Revenue in AMD's embedded segment, which comprises lower-power chips for networking, experienced a significant surge from $595 million to $1.56 billion year over year. This growth can be attributed in part to the additional revenue generated from AMD's acquisition of Xilinx.
In the gaming segment, which includes graphics processors for PCs and chips for gaming consoles such as the Sony PlayStation 5, sales amounted to $1.76 billion. Although slightly down from $1.88 billion last year, the segment remains a significant source of revenue for AMD.
Image Source – ET Telecom
