Lisa Su, President and CEO of Advanced Micro Devices (AMD), has a 3rd generation Ryzen desktop processor while speaking during a keynote session at the 2019 Consumer Electronics Show (CES) in Las Vegas, January 9, 2019.
David Paul Morris | Bloomberg | Getty Images
AMD reported fourth-quarter earnings after Tuesday, beating analyst estimates for earnings and sales and delivering a very strong sales forecast for 2022.
The AMD stock rose above 11% at some point during longer trading.
Here’s how the chip maker fared in relation to the Refinitive consensus estimates for the quarter ended December 25:
- EPS: $ 0.92, adjusted, versus $ 0.76 estimated, a 26% year-over-year increase
- Income: $ 4.83 billion against an estimated $ 4.53 billion, an increase of 49% year-on-year
AMD said it expects $ 21.5 billion in sales in 2022, ahead of analysts’ expectations of $ 19.26 billion. That would be a 31% increase over sales in 2021. AMD said it expected $ 5 billion in sales in the first quarter, driven by server and PC processor sales.
In 2021, AMD’s sales increased by 68% and the company’s gross margin increased to 48%, an increase of over 3 percentage points from last year.
AMD has seen an increase in PC and electronics sales over the last two years and has recently released new chips with significant performance improvements that allow the processor maker to challenge Intel, which is the largest supplier of PC chips.
These sales are reported in AMD’s computer and graphics segment, which reported 32% growth to $ 2.6 billion in revenue. AMD said sales were driven by sales of Ryzen processors and Radeon graphics processors, noting that the average selling price of both product lines increased on an annual basis.
AMD also sells chips for cloud servers and game consoles, which are reported in the Embedded, Enterprise and Semi-custom segment. This segment rose 75% to $ 2.2 billion, driven by sales of server chips and game consoles, AMD said.
“We expect [semi-custom] revenue is growing this year driven by continued strong demand for the latest Microsoft and Sony consoles, “AMD Lisa Su said in a call with analysts, saying the current console upgrade cycle surpasses” all previous generations. “
AMD has previously announced its plans to buy Xilinx in a $ 35 billion deal that would give the company more firepower to compete with Intel in the data center chip market. The company said on Tuesday it had received approval from Chinese regulators for the transaction, but the acquisition has not yet been completed.
“The only remaining regulatory review required is FTC approval of our HSR re-application, and we expect to complete the transaction in the first quarter of 2022,” Su said.
AMD said it has the production capacity it needs to grow in 2022, a recognition of the current worldwide chip shortage that is buzzing with competitors. AMD said it spent $ 1 billion in 2021 to secure long-term production capacity. Su said in September last year that she expects the chip shortage to become less severe this year.
AMD said it repurchased $ 1.8 billion of its shares in 2021.
AMD shares fell 22% year-to-date as the markets closed on Tuesday.
Correction: This story has been updated with the correct analyst expectations for 2022 guidance.