AMD EPYC Processors
Courtesy of AMDAdvanced Micro Devices gave investors reason to cheer Tuesday when it reported earnings that topped expectations and said it would sell more chips at a greater profit than previously anticipated.
AMD (ticker: AMD) stock rallied in the extended session, advancing nearly 10% after the earnings release.
The smaller rival to computing titan Intel (INTC), AMD said its personal computer and server chips were going to produce more revenue at a wider margin than it had previously thought amid the Covid-19 pandemic. Its custom chips unit would also contribute more substantially to revenue, suggesting that the next generation of videogame consoles, likely to launch in the fall, will continue to buoy the company’s revenue.
AMD beat investors’ expectations for the second quarter that closed in June, reporting net income of $157 million, amounting to 13 cents a share, compared with profit of $35 million, or 3 cents a share, a year ago. Adjusted for stock compensation, AMD reported earnings of 18 cents a share. The company booked total revenue of $1.93 billion.
Wall Street had expected adjusted earnings of 16 cents a share on sales of $1.86 billion.
“We delivered strong second quarter results, led by record notebook and server processor sales as Ryzen and Epyc revenue more than doubled from a year ago,” AMD CEO Lisa Su said. “Despite some macroeconomic uncertainty, we are raising our full-year revenue outlook as we enter our next phase of growth driven by the acceleration of our business in multiple markets.”
AMD said that it now expects third-quarter sales of $2.45 billion to $2.65 billion. Sell-side analysts had previously forecast third-quarter sales of $2.31 billion.
AMD stock has benefited from Intel’s disclosure last week that it was delaying its seven-nanometer manufacturing process another six months and benefited from another lift after AMD announced a new line of chips. Shares of AMD are up 35% this month as the S&P 500 Index has gained 5.4%. The PHLX Semiconductor Index advanced 6% in the past month.
Corrections & amplifications: AMD reported profits of $35 million, or 3 cents a share, in the quarter ending June 2019. A previous version of this article incorrectly stated the net income and per share earnings figure for the year ago period.
Write to Max A. Cherney at max.cherney@barrons.com
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July 29, 2020 at 04:42AM
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AMD Stock Is Soaring After Earnings. Here’s Why. - Barron's
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