Lisa Su, President and CEO of AMD, speaks about the AMD EPYC processor during a keynote speech at CES 2019 in Las Vegas, Nevada, the United States, January 9, 2019.
Steve Marcus | Reuters
AMD on Tuesday reported first-quarter earnings and sales that slightly beat Wall Street expectations and provided in-line guidance for the current quarter.
AMD shares fell 8% in extended trading.
Here’s how that performed compared to LSEG consensus expectations for the quarter ending in March:
- Earnings per share: 62 cents adjusted versus 61 cents expected
- Income: $5.47 billion versus $5.46 billion expected.
AMD said it expects revenue of about $5.7 billion for the current quarter, in line with Wall Street estimates of the same rough total. This would represent around 6% annual growth.
The company reported net income of $123 million, or 7 cents per share, compared with a net loss of $139 million, or 9 cents per share, in the same period a year earlier. Revenue increased by approximately 2% from the previous year.
AMD said its closely watched data center segment grew 80% on an annual basis to $2.3 billion on sales of its MI300 AI chip, which competes with Nvidia’s AI graphics processors.
But investors are more interested in the company’s AI chips. AMD CEO Lisa Su said its MI300X Ai chip is used at Microsoft, Meta and Oracle. AMD said it has sold more than $1 billion worth of AI chips since its launch in the fourth quarter of 2023.
AMD expects $4 billion in AI chip sales in 2024, up from $3.5 billion forecast in January.
AMD also makes central processors that are often paired with advanced AI chips in servers. Su told analysts on a call that the company believes it has taken market share in the server processor segment – probably by Intel. Su said AMD was seeing “signs of improving demand” for its processors due to the AI server boom.
AMD’s weakest division is gaming, down 48% on an annual basis to $922 million, which the company says is due to falling sales of chips for gaming consoles and PCs. . For example, AMD manufactures chips for Sony’s PlayStation 5. AMD’s game sales were below the StreetAccount estimate of $969 million.
AMD’s initial business, processors for chips and PCs, is reported in customer segment revenue. AMD reported first-quarter revenue of $1.4 billion, an 85% year-over-year increase, suggesting that last year’s PC slump is over. AMD also points out that its chips are capable of running artificial intelligence programs locally, which would allow it to power the so-called “AI PCs” that many in the industry are counting on to drive sales of new laptops. and office.
The company’s integrated segment, comprised of products acquired through the 2022 Xilinx acquisition, reported a decline in sales, down 46% on an annual basis to $846 million, lagging Wall Street expectations of $942 million.
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