By Wallace Witkowski, MarketWatch
Advanced Micro Devices Inc.’s stock surged in the extended session Tuesday after the chip maker topped Wall Street estimates for the quarter.
AMD shares (NAS:AMD) rallied 3% after hours, following a 0.2% decline to close the regular session at $27.63, and were up 5% premarket Wednesday. In comparison, the PHLX Semiconductor Index (NASDAQ:SOX) closed up 0.8%, the S&P 500 index (S&P:SPX) closed up 0.1%, and the tech-heavy Nasdaq Composite Index (AMERICAN:COMP) finished down 0.8%.
The company reported first-quarter net income of $16 million, or 1 cent a share, compared with $81 million, or 8 cents a share, in the year-ago period. Adjusted earnings were 6 cents a share. Of the 28 analysts surveyed by FactSet, AMD on average was expected to post adjusted earnings of 5 cents a share.
Revenue declined to $1.27 billion from $1.65 billion in the year-ago quarter. Wall Street expected revenue of $1.26 billion from AMD, according to 28 analysts polled by FactSet.
“We delivered solid first quarter results with significant gross margin expansion as Ryzen and EPYC processor and datacenter GPU revenue more than doubled year-over-year,” said Lisa Su, AMD’s president and chief executive, in a statement. “We look forward to the upcoming launches of our next-generation 7nm PC, gaming and datacenter products which we expect to drive further market share gains and financial growth.”
The company said that its year-over-year revenue decline was “primarily due to lower graphics channel sales, partially offset by increased client processor and datacenter GPU sales.”
Computing and graphics sales declined to $831 million from $1.12 billion in the year-ago quarter. Analysts surveyed by FactSet expected computing and graphics sales to decline 23% to $855.7 million from the year-ago quarter.
Enterprise, embedded and semi-custom sales declined to $441 million from $532 million in the year-ago period. Analysts expected $410.2 million.
For the second quarter, AMD expects revenue of $1.47 billion to $1.57 billion, while analysts expect revenue of $1.51 billion.