Advanced Micro Devices Inc. expects strong data center and gaming sales to maintain strong sales in 2021, after the chip maker reached $ 3 billion in quarterly revenue for the first time on Tuesday and its results and outlook outpaced those Wall Street estimates.
AMD AMD,
reported net income of $ 1.78 billion in the fourth quarter, or $ 1.45 per share, compared to $ 170 million, or 15 cents a share, in the same period last year.
After adjusting for the release of a $ 1.3 billion tax assessment grant because of good results and other factors, the chip company reported earnings of 52 cents per share, compared with 32 cents per share for the period the previous year. Revenue increased to $ 3.24 billion, from $ 2.13 billion in the same quarter last year.
Analysts surveyed by FactSet had predicted adjusted earnings of 47 cents a share on revenue of $ 3.03 billion.
AMD posted fourth-quarter sales of $ 1.96 billion for computer and graphics chips, up 18% from last year’s $ 1.66 billion, compared with analysts’ expectations of $ 1 , 8 billion. Sales of embedded and semi-personalized chips – the unit that includes data center and game console revenue – were $ 1.28 billion, 176% up from $ 465 million a year ago, compared to the average forecast US $ 1.24 billion analysts.
AMD President and CEO Lisa Su said on the conference call that gaming products got a big boost with the launch of Microsoft Corp’s MSFT.
new line of Xbox and SNE consoles from Sony Corp.
PlayStation 5.
“Our semi-custom [system on a chip] sales are rising faster than in the last cycle of the console, and we expect sales to be better than typical seasonality in the first half of this year, based on strong current demand, ”Su said in the conference call.
On the server side, Su said cloud and corporate sales remained strong.
“Google GOOG,
GOOGL,
Microsoft, Tencent 700,
and others continue to expand their use of Epyc processors to power larger portions of their critical internal infrastructure and the number of cloud instances with AMD technology is expanding, ”said Su.
The company expects first quarter revenue between $ 3.1 billion and $ 3.3 billion, and 2021 revenue to increase by about 37%, or about $ 13.37 billion.
Analysts expect revenue of $ 2.72 billion in the first quarter and revenue of 2021 of $ 12.26 billion.
Su also said that AMD “has overcome several important regulatory milestones so far” in relation to the acquisition of Xilinx Inc. XLNX,
and that the deal continues to be closed by the end of 2021.
AMD shares, which had risen up to 3% after hours, fell less than 1% in extended trading, after a 0.6% increase in the regular session, closing at $ 94.71.
In the past 12 months, AMD’s shares have gained 88%. In comparison, the PHLX SOX semiconductor index,
rose 58% over that time, the S&P 500 SPX index,
gained 17%, and the Nasdaq Composite index, heavy on technology,
increased 46%.