AMD earnings Q3 2021

AMD reported third-quarter earnings after the bell on Tuesday, with earnings and income beating analyst expectations, and a robust forecast for the fourth quarter.

The inventory was up as a lot as 1% in prolonged buying and selling.

Here is how the chipmaker did towards Refinitiv consensus estimates for the quarter ending Oct. 2:

• EPS: $0.73, adjusted, versus $0.67 anticipated, up 16% year-over-year.
• Income: $4.31 billion, versus $4.12 billion anticipated, up 54% year-over-year

AMD stated it anticipated $4.5 billion in gross sales within the fourth quarter, forward of analyst expectations of about $4.25 billion in gross sales within the quarter. AMD is forecasting 39% annual development within the fourth quarter.

AMD is among the firms that has benefitted probably the most from the surge in electronics gross sales over the previous 18 months as its central processors and graphics processors energy PCs, servers and recreation consoles. These gross sales are logged in AMD’s computing and graphics section, which reported $2.4 billion in income, up 44% year-over-year.

The PC market has slowed from its torrid tempo a yr in the past when individuals world wide nonetheless wanted computer systems to work or study from residence, however AMD stated its chips have been promoting at increased common costs as clients go for extra highly effective processors.

AMD experiences server chip and console chip gross sales in its Embedded, Enterprise, and Semi-custom section. AMD reported $1.9 billion in gross sales on this vital class, up 69% year-over-year pushed by Epyc server chips, and better “semi-custom” gross sales, that are the semiconductors it sells to recreation console makers.

AMD is within the strategy of taking market share within the server market behind its Epyc processors, as giants like Microsoft and Google purchase its chips to run their cloud companies. AMD CEO Lisa Su stated in a statment that knowledge middle gross sales doubled year-over-year and now represents “mid-20s” of general AMD income.

In the meantime, recreation consoles, like Sony’s Ps 5 and new Microsoft Xbox fashions, stay in excessive demand and arduous to search out as they promote out rapidly. Likewise, AMD’s graphics and central processors are arduous to search out in inventory in shops.

“Semi-custom income grew sequentially and year-over-year as demand for the most recent Microsoft and Sony consoles stays very robust,” Su stated on a name with analysts on Tuesday. “We count on semi-custom income to extend sequentially within the fourth quarter as we additional ramp provide to deal with the continued recreation console demand.”

AMD is a fabless chip firm. It designs the expertise inside its semiconductors and outsources manufacturing to foundry companions like TSMC and GlobalFoundries. In September, AMD CEO Su stated she expects the chip scarcity to turn out to be much less extreme in 2022.

AMD continues to maintain its prices underneath management and enhance its profitability. It stated its gross margin was 48%, up from 44% in the identical interval final yr as a result of clients are shopping for dearer processors. It forecast gross margins at 49.5% within the fourth quarter. AMD’s web earnings for the quarter was $893 million.

Final October, AMD introduced its plans to purchase Xilinix in a deal value $35 billion that may give the corporate extra firepower to compete with Intel within the knowledge middle chip market. AMD stated the deal was nonetheless on observe to shut by the tip of 2021 and the corporate is making “good progress” to securing regulatory approvals.

AMD stated it repurchased $750 million in shares through the quarter. AMD inventory is up over 30% yr to this point.