AMD's stock collects after hours as a year-round view holds out hope

Advanced Micro Devices Inc. shares were in the extension of the season Tuesday after the chipmaker's full-year view held some promise, while expected sales and the first quarter missed Wall Street estimates and earnings were in-line.

AMD shares

AMD, -4.61%

rallied 9% after hours and held onto a conversation with analysts, after a 4.6% decline to close the regular $ 19.25 session. For comparison, S & P 500

SPX, -0.1[ads1]5%

closed down 0.2%, the technological heavy Nasdaq Composite Index

COMP, -0.81%

closed down 0.8%, and PHLX Semiconductor Index

SOX -1.45%

terminated 1.5%.

AMD said in 2019 that it expects "high one-digit percentage growth revenue growth driven by Ryzen, Epyc and Radeon data center GPU product sales that the company hits 7nm products throughout the year." Analysts predict 2019 revenue of 6.89 billion or 6.3% higher than AMDs reported 2018 revenue of $ 6.48 billion.

For the first quarter, AMD expects revenues of $ 1.2 billion to $ 1.3 billion, a sequential decline of about 12% and about 24% less than a year ago. Analysts had expected sales of $ 1.65 billion.

"When we look at Q1, especially on an annual basis, there are many moving pieces," said Lisa Su, AMD CEO, on the analyst call. "But this is primarily due to the graphics channel, and it's both the reduced change and the absence of blocking revenue on an annual basis, as well as the semi-custom business."

"But as we move forward, when we enter Q2 and beyond, we see a significant opportunity with the ramp of our new products, and that's the way we see the year," said Su.

AMD that weakness in the first quarter would be "driven primarily by the continued softness of the graphics channel and the seasonal business over time" on a sequential basis and "driven by lower graphics sales due to excess channel inventory, the absence of blockchain-related GPU revenue and lower memory sales "on an annual basis.

" So, in relation to the year-round guidance of high single digits, the primary growth drivers are Ryzen and Epyc. . . With data center GPU also, we expect it to be up, Su said. Ryzen is AMD's PC chip line, while Epyc is its server line of chips.

The company reported net income of $ 38 million in the fourth quarter, or 4 cents per share, compared to a loss of $ 19 million or 2 cents share, in the period years ago. Adjusted earnings were 8 cents per share. On average, 29 of the 29 analysts examined by FactSet were expected to enter an adjusted earnings of 8 cents per share. Estimate, a software platform that uses crowdsourcing from hedge fund managers, brokerage firms, analysts, and other buyers, required revenue of 10 cents per share.

Revenues rose to $ 1.42 billion from $ 1.34 billion in the quarter. Wall Street anticipated revenue of $ 1.44 billion from AMD, according to 28 analysts asked by FactSet. Estimated expected revenue of $ 1.46 billion, and AMD's estimated $ 1.4 billion revenue to $ 1.5 billion.

Sales of computers and graphics increased to $ 986 million from $ 908 million over the years. Analysts investigated by FactSet had estimated $ 939 million in sales and graphics sales.

Business, built-in, and semi-custom sales increased to $ 433 million from $ 432 million in the years ago, while analysts had expected $ 493.7 million.

Investor's expectations may have been worse after a revenue alert from competitor Nvidia Corp.

NVDA, -4.64%

on Monday. Nvidia reduced the revenue outlook for the last quarter by $ 500 million due to weakness in China and a poor initial decision by its new line of playing cards.

Of the 36 analysts covering AMD, 15 have buy or overweight, 15 have ratings and six have sell or underweight ratings, with an average price target of $ 22.47.

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