AMD reported better than expected earnings this week, bucking the trend as fellow chipmakers struggle.
The company’s fourth quarter results beat Wall Street expectations for both sales and profit, but did warn of a 10% decline in year-on-year sales in the current quarter. AMD’s earnings per share for Q$ stood at $0.69, adjusted, beating expectation of $0.67 per share. Revenue was reported at $5.6 billion, compared to $5.5 billion expected.
For Q1 2023, however, the outlook was not so rosy. AMD expects sales of $5.3 billion, just under analyst estimates of $5.47 billion. AMD’s outlook suggests a 10% decline in sales compared to the same period last year. In 2022, still buoyed by the pandemic-led surge in PC sales, AMD sales rose 44%. Shares jumped 2% immediately after the earnings report was released.
The company attributed the encouraging results to its embedded and data center businesses, and said client revenue, which includes chips for PCs and laptops, and its gaming offerings were all down.
The data center segment grew 42% year-on-year to $1.7 billion, while the embedded segment of the business rose 1,868%, mainly due to sales from its purchase of Xilinx.
In contrast, AMD’s main competitor Intel suffered a tricky few days. Last week the company issued a lower-than-expected sales guidance, as it struggles with a loss of market share and the general downturn in the PC market.
Yesterday, Intel announced it would be making broad cuts to both executive and employee pay in order to make savings. Intel spokesperson Addy Burr said the “changes are designed to impact our executive population more significantly and will help support the investments and overall workforce.”
Intel Chief Executive Pat Gelsinger conceded that the company has “stumbled” and has lost market share to rivals including AMD.