AMD earnings in Q1 2022

Lisa Su, CEO, AMD

Scott Mlyn | CNBC

AMD reported first quarter earnings after the bell on Tuesday, beating analysts’ estimates for earnings and revenues, sending the stock up more than 3% in extended trading.

Here’s how the chip maker fared against Refinitiv’s consensus estimates in the quarter ended March:

  • EPS: $ 1.13, adjusted, versus $ 0.91 expected, up 117% year-over-year
  • income: $ 5.89 billion, versus $ 5.52 billion forecast, up 71% year-over-year

AMD said it expects $ 6.5 billion in sales this quarter, beating analysts’ expectations of $ 6.38 billion.

AMD’s results on Tuesday suggest that the chip maker is still growing strongly, with sales growth of 71% in the first quarter and each of its individual business lines growing in double digits during the quarter.

A highlight for AMD is its high-end server chip business, which competes primarily with Intel. Some data shows that AMD has taken market share from its rival as it tries to get its manufacturing process back.

Some analysts suggest PC sales may slump this year after two years of shipments exploding as people needed laptops to work from home or go to school remotely. Some investors believe the pandemic PC boom is over, but AMD, which provides the processor at the heart of many laptops and desktops, is not in decline.

PC sales are reported in AMD’s computer and graphics segment, which was up 33% year-on-year and was 8% up from the December quarter.

Cloud server sales were recorded in AMD’s Embedded, Enterprise and Semi-custom segments, which increased 88% to $ 2.5 billion. AMD said the increase was driven by increased sales of server processors and semi-custom sales, which are the chips that enter the heart of gaming consoles like the Playstation 5.

AMD shares have had a tough 2022, falling more than 39% so far, following a blowout in 2021 when its sales rose 68% and gross margin grew to 48%. Investors are moving away from semiconductor stocks in the face of rising inflation risk.

Last week, Intel gave up a disappointing forecast for the June quarter, citing weak PC demand and macroeconomic challenges.

AMD said it completed the acquisition of Xilinx during the quarter. The deal was originally announced in 2020 with a price tag of 35 billion dollars. AMD said its findings included six weeks of revenue from the deal and that without Xilinx sales, revenue would only have grown 55% year-over-year to $ 5.3 billion.