Advanced Micro Devices (AMD) on Tuesday reported fiscal first-quarter earnings that beat expectations and gave strong guidance for current-quarter revenue. Sales of the company's data center segment, which includes artificial intelligence (AI) graphics chips and central processing units, beat expectations, rising 57%.
AMD's forecast also includes $800 million in costs, which the company said will arise from U.S. restrictions on exports of some of the company's artificial intelligence chips during the quarter.
AMD CEO Lisa Su
Advanced Micro Devices (AMD) on Tuesday reported fiscal first-quarter earnings that beat expectations and gave a strong revenue forecast for the current quarter.
AMD shares rose more than 4% in after-hours trading.
Here's how the chipmaker compared with market expectations for the quarter ended March 29:
Adjusted earnings per share: 96 cents, above expectations of 94 cents;
Revenue: $7.44 billion, above expectations of $7.13 billion.
For the current quarter, AMD expects sales of about $7.4 billion and gross margins of 43%, while Wall Street expects adjusted earnings of 86 cents per share on sales of $7.25 billion.
AMD's forecast also includes $800 million in costs that the company said were incurred as a result of U.S. restrictions on exports of some of the company's artificial intelligence chips during the quarter.
The company reported net income of $709 million, or 44 cents per diluted share, compared with net income of $123 million, or 7 cents per share, in the year-earlier period. Revenue increased 36% year over year.
AMD is the second-largest supplier of server central processing units after Intel Corp., but its Epyc series of processors has been gaining market share in recent years.
The company is also Nvidia's strongest competitor in the field of "large GPUs," or graphics processors. Thousands of these chips are deployed in data centers to build and deploy generative artificial intelligence. In AMD's fiscal 2024, its AI GPU sales hit $5 billion.
Both parts of the business are housed in the company's data center unit, which generated sales of $3.7 billion, beating StreetAccount estimates. Data center sales increased 57% year over year, which the company attributed to demand for EPYC processors as well as its Instinct GPUs.
The company's other major division, Client and Gaming, includes chips for consumer devices such as laptops, gaming PCs and consoles. Overall revenue for the segment increased 28% year over year to $2.9 billion. AMD said sales of its laptop and PC chips, known as client revenue, soared 68% year over year on strong demand for the Zen 5 chips it launched last summer.
However, sales in the gaming business fell 30% year-over-year, which the company attributed to lower console chip revenue.
Revenue from AMD's embedded division, which is largely driven by the company's 2022 acquisition of Xilinx, fell 3% year over year to $823 million.