Earnings

AMD beats, driven by game console and PC sales

Lisa Su, president and chief executive officer of Advanced Micro Devices (AMD), holds a 3rd generation Ryzen desktop processor while speaking during a keynote session at the 2019 Consumer Electronics Show (CES) in Las Vegas, Jan. 9, 2019.

David Paul Morris | Bloomberg | Getty Images

AMD stock rose over 3% in extended trading after the company announced revenue and earnings that beat Wall Street’s already high expectations for the chipmaker.

Here’s how AMD did versus Wall Street expectations:

  • EPS: $0.52, adjusted, versus $0.47 according to Refinitiv consensus estimates
  • Revenue: $3.24 billion, versus $3.03 billion according to Refinitiv consensus estimates

AMD’s revenue was up 53% year-over-year, the company said. One highlight was its embedded segment, which sells CPUs and graphics processors for game consoles like the Sony PS5, were up 176% year-over-year.

AMD also provided a strong forecast for the current quarter of between $3.1 billion and $3.3 billion and said that it expects 2021 revenue would grow 37%.

At the start of trading on Tuesday, shares of AMD were up 85% over the past year. That’s partially because of investor enthusiasm for semiconductors, but it’s also because in the past year AMD has gained a technological edge on its primary competitor, Intel.

AMD outsources its manufacturing to partners including Taiwan’s TSMC, whereas Intel is still committed to manufacturing its best chips. That’s allowed AMD to access more advanced chip manufacturing on a so-called 5-nanometer process, which makes denser and more efficient chips.

AMD will also likely benefit from a surge in PC sales during the pandemic. It also sells chips to Microsoft and Sony for game consoles, which have grappled with high-demand and product shortages after launching late last year.

AMD also launched new processors and graphics chips last fall that have been consistently sold out.

In October, AMD announced that it planned to buy Xilinix in a deal worth $35 billion that should close by the end of this year. Xilinix focuses on specialized chips that can efficiently handle tasks like compressing videos, as compared to AMD’s general purpose processors. The acquisition is expected to give AMD more firepower to compete with Intel in the data center chip market.

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