“Third quarter results came in below our expectations due to the softening PC market and substantial inventory reduction actions across the PC supply chain,” said CEO Lisa Su.
Updated at 4:44 pm EST
Advanced Micro Devices (AMD) – Get Advanced Micro Devices Inc. Report posted modestly weaker-than-expected third quarter earnings Tuesday and a softer end-year chip sales forecast amid softening PC demand.
Shares in the chipmaker moved higher, however, as investors looked to solid gains for data center and gaming sales that offset, and perhaps isolated, the weakness in its PC division.
AMD said non-GAAP earnings for the three months ending on September 24 came in at 67 cents per share, an 8% decline from the same period last year and just shy of the Street consensus forecast of 68 cents per share.
Group revenues, AMD said, rose 30% to $5.6 billion, essentially matching analysts’ forecasts following the chipmaker’s warning on broader market demand earlier this month. Gaming revenues were up 13.7% to $1.631 billion while data center rose 45% to $1.61 billion.
AMD, which has fallen more than 42% since early August amid a surge in short-term interest rates, a rotation out of tech stocks and new U.S restrictions in technology exports to China, cautioned on October 6 that ‘significantly’ weaker PC demand would trim around $1 billion from its summer revenue forecast.
AMD Earnings Live Blog With Eric Jhonsa
Texas Instruments (TXN) – Get Texas Instruments Incorporated Report echoed that concern in its third quarter update last week, noting a pullback in demand for chips found in personal electronics and industrial equipment.
Looking into the final months of the year, however, AMD said it sees quarterly revenue in the region of $5.5 billion, plus or minus $300 million, with gross margins rising to around 51%. Refinitv estimates were looking for a revenue forecast of around $5.85 billion.
“Third quarter results came in below our expectations due to the softening PC market and substantial inventory reduction actions across the PC supply chain,” said CEO Lisa Su. “Despite the challenging macro environment, we grew revenue 29% year-over-year driven by increased sales of our data center, embedded and game console products.”
“We are confident that our leadership product portfolio, strong balance sheet, and ongoing growth opportunities in our data center and embedded businesses position us well to navigate the current market dynamics,” she added.
AMD shares were marked 2.13% higher in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $90.93 each.
