Lisa Su, President and CEO of Advanced Micro Devices (AMD), holds a 3rd generation Ryzen desktop processor while speaking during a keynote address at the 2019 Consumer Electronics Show (CES) in Las Vegas, January 9, 2019.
David Paul Morris | Bloomberg | Getty Images
AMD shares were not strong in extended trading, after the company announced its earnings and earnings that beat Wall Street’s already high expectations for the disc maker.
This is how AMD reacted to Wall Street’s expectations:
- VPA: $ 0.52, adjusted, compared to $ 0.47 according to Refinitiv consensus estimates
- Income: $ 3.24 billion, compared to $ 3.03 billion according to Refinitiv estimates
AMD also gave a strong forecast for the current quarter of between $ 3.1 billion and $ 3.3 billion, saying it expects revenue to grow by 37% by 2021. AMD’s turnover in 2020 is 45% higher than on an annual basis.
The biggest highlight for AMD this quarter was its business segment, which rose 176% year-on-year and 13% from last quarter to $ 1.28 billion. The division sells server chips, as well as CPUs and graphics processors for game consoles such as the Sony PS5 and Microsoft Xbox One.
AMD attributed the growth to its semi-personal sales, which it calls its console chip business, and said there is a strong demand for the current generation of Sony and Microsoft consoles. It is also said that its server revenue has grown steadily.
AMD’s processors and graphics chips for computers, which they call Computing & Graphics, rose 18% year-on-year to $ 1.96 billion. This was driven by an increase in processor sales, AMD said.
AMD last fall introduced new processors and graphics chips that sold out throughout. It is said that computer revenue for computers has grown on an annual basis, indicating that its Ryzen CPUs are competing strongly with Intel for market share.
At the start of trading on Tuesday, AMD’s shares have risen 85% over the past year. This is due in part to investors’ enthusiasm for semiconductors, but it’s also because AMD has gained a technological edge over its primary competitor Intel in recent years. Intel was flat in extensive trading.
AMD is outsourcing its manufacturing to partners, including the TSMC in Taiwan, while Intel is still committed to producing its best chips. This gives AMD access to more advanced chip manufacturing on a so-called 5-nanometer process, which makes denser and more efficient chips.
AMD announced in October that it plans to buy Xilinix in a $ 35 billion deal that would close by the end of this year. Xilinix focuses on specialized chips that can handle efficiently, such as video compression, compared to AMD’s general purpose processors. The acquisition is expected to give AMD more power to compete with Intel in the data center chip market.