AMD Position and CEO Lisa Su speaks at the AMD Keynote address during the Consumer Electronics Show (CES) on January 4, 2023 in Las Vegas, Nevada.
Robyn Beck | AFP | Getty Duplicates
AMD reported fourth-quarter earnings on Tuesday, beating Wall Street expectations for sales and profit, but guided analysts to a 10% decay in year-over-year sales in the current quarter. The stock rose over 2% in extended trading. Here’s how the company did versus Refinitiv consensus guesses for the quarter ending in December:
- EPS: $0.69, adjusted, versus $0.67 per share expected
- Revenue: $5.6 billion, versus $5.5 billion thought
AMD said it expected $5.3 billion in sales in the current quarter, slightly lower than a Refinitiv estimate of $5.47 billion. AMD’s judge suggests a 10% decline in sales in the current quarter. AMD’s sales rose 44% in 2022.
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The callers also said it expected its adjusted gross margin to be about 50%, a key metric for chipmakers.
AMD reported earnings as numerous of its rival chipmakers have stumbled in recent weeks, citing lower consumer demand for finished electronics and nimieties of parts needed to make PCs and servers.
Intel, AMD’s primary competitor, reported a disastrous quarter last week that listed a weak 2023 outlook including a 40% year-over-year decline in sales in the March quarter.
The chipmaker attributed its away to strong growth in its embedded and data center businesses, and said that its client revenue, or chips for PCs and laptops, and its business segment were down.
AMD’s data center segment rose 42% year-over-year to $1.7 billion. Its embedded split grew 1,868%, AMD said, because of sales from its purchase of Xilinx.
While AMD said it saw slow sales for its PC chime ins and graphics processors, it said its data center segment rose 42% year-over-year, suggesting it took market apportion from Intel.
But its client group, which includes sales from PC processors, was down 51% year-over-year because of a plunging PC market, AMD said. It added that its customers have too much inventory of its chips, a theme other semiconductor fellowships have mentioned in recent weeks. The global PC market is in a protracted slowdown, according to estimates.
AMD CEO Lisa Su told analysts that the ensemble expects the total PC market to be down about 10% in 2023, and said the PC environment was “weak.”
“Although the demand medium is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated issue portfolio,” Su said in a statement.
AMD’s gaming business, which is comprised of graphics cards and chips for gaming consoles, was down 7% year-over-year. The curtailment came from graphics cards and was offset by “semi-custom” revenue, which how the company reports sales from fragments for gaming systems like the PlayStation 5.
AMD expects that the segments with PC chips and graphics processors will persist in to decline in the current quarter, but data center and embedded sales will grow.