Advanced Micro Devices (AMD) posted better-than-expected fourth quarter earnings Tuesday as a big gain in data center chip sales offset ongoing weakness in its gaming and personal computing divisions.
AMD said non-GAAP earnings for the quarter came in at 67 cents per share, a 27.2% decline from the same period last year that essentially matched Street forecasts. Group revenues, AMD said, rose 30% to $5.6 billion, just ahead of analysts' forecasts of a $5.5 billion tally. AMD itself had forecast revenues in the region of $5.5 billion, plus or minus $300 million.
Gaming sector revenue was down 7% from last year to $1.6 billion, while data center surged 42% to $1.7 billion. The client segment, which includes personal computing, saw a 51% revenue decline to $903 million while embedded segment revenues were pegged at $1.4 billion.
Looking into the current financial year, AMD said it sees first quartger revenue in the region of $5.3 billion, plus or minus $300 million, compared to the Refinitiv forecast of $5.48 billion. Year over year, AMD said, gaming and client segment revenues will continue to decline, offset by growth in data center and embedded.
“2022 was a strong year for AMD as we delivered best-in-class growth and record revenue despite the weak PC environment in the second half of the year," said CEO Dr. Lisa Su. "We accelerated our data center momentum and closed our strategic acquisition of Xilinx, significantly diversifying our business and strengthening our financial model."
"Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated product portfolio,” she added.
AMD shares were marked 3.7% higher in after hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $77.84 each.
Last week, Intel (INTC), AMD's main U.S. rival, delivered weaker-than-expected fourth quarter earnings and said lingering weakness in PC demand would pressure margins and clip near-term profits over the coming months.
Intel said it sees revenues slowing further, to between $10.5 and $11.5 billion over the current quarter
Gross margins for the three months ending in March are now expected to narrow to around 34.1%, nearly half of the chipmaker's long-term target of around 60%.
With weak PC demand expected to last well into the first half of the year, and data center clients pulling back on spending plans amid broader macro uncertainty, Intel expects a March quarter loss of 15 cents per share.
