Advanced Micro Devices Inc. Expects strong data center and gaming sales to keep sales strong in 2021 after the chip maker first hit $ 3 billion in quarterly sales late Tuesday and results and outlook both beat Wall Street estimates.
AMD AMD,
reported fourth-quarter net income of $ 1.78 billion, or $ 1.45 a share, compared to $ 170 million or 15 cents a share in the same period a year ago.
Adjusted for the release of a $ 1.3 billion tax allowance due to strong results and other factors, the chip company reported earnings of 52 cents a share, compared to 32 cents a share in the same period a year ago. Sales increased from $ 2.13 billion in the same quarter a year ago to $ 3.24 billion.
Analysts polled by FactSet had predicted adjusted earnings of 47 cents a share on revenue of $ 3.03 billion.
AMD reported fourth-quarter revenues for computer and graphics chips of $ 1.96 billion, an increase of 18% from $ 1.66 billion last year, compared to analyst expectations of $ 1.8 billion. Embedded and semi-custom enterprise chips revenue – the unit that includes data center and game console revenue – was $ 1.28 billion, up 176% from $ 465 million a year ago, compared to the average forecast from analysts of $ 1.24 billion.
AMD President and CEO Lisa Su said on the conference call that gaming products were greatly boosted by the release of Microsoft Corp.’s MSFT last quarter,
new line of Xbox consoles and Sony Corp.’s SNE,
PlayStation 5.
“Our semi-custom [system on a chip] sales are growing faster than the previous console cycle and we expect sales to be better than typical seasonality in the first half of this year, based on the current strong demand, ”said Su on the call.
On the server side, Su said sales in the cloud and enterprise remained strong.
“Google GOOG,
GOOGL,
Microsoft, Tencent 700,
and others continue to expand their use of Epyc processors to power greater parts of their critical internal infrastructure and the number of AMD-powered cloud instances is expanding, ”said Su.
The company expects sales in the first quarter to be between $ 3.1 billion and $ 3.3 billion, and sales to increase by approximately 37% by 2021, or to approximately $ 13.37 billion.
Analysts expect Q1 revenue of $ 2.72 billion and 2021 revenue of $ 12.26 billion.
Su also said that AMD has “achieved a number of significant regulatory milestones so far” with regard to the acquisition of Xilinx Inc. XLNX,
and that the deal remains on track to close in late 2021.
AMD shares, which were up as much as 3% after closing, last fell less than 1% during long-term trading, after climbing 0.6% during the regular session, closing at $ 94.71.
In the past 12 months, AMD shares have gained 88%. For comparison: the PHLX Semiconductor Index SOX,
rose 58% during that time, the S&P 500 index SPX,
17% won, and the technically tough Nasdaq Composite Index COMP,
rose 46%.