AMD earnings in the first quarter of 2022

Lisa Su, CEO of AMD

Scott Mlyn | CNBC

AMD reported first-quarter earnings after the bell on Tuesday, beating analysts’ estimates for earnings and revenue, sending shares up more than 3% in extended trading.

Here’s how the chipmaker fared against Refinitiv’s consensus estimates in the quarter ending March:

  • EPS: $1.13, adjusted, vs. $0.91 expected, up 117% year over year
  • Income: $5.89 billion vs. $5.52 billion expected, up 71% year over year

AMD said it expected $6.5 billion in sales in the current quarter, above analyst expectations of $6.38 billion.

AMD’s results on Tuesday suggest the chipmaker continues to grow ferociously, with sales growing 71% in the first quarter, and each of its individual business lines growing by double digits during the quarter.

A highlight of AMD is its high-end server chip business, which mainly competes with Intel. Some data points show that AMD has taken market share from its rival as it tries to regain its manufacturing prowess.

Some analysts suggest PC sales could slow this year after two years in which shipments soared as people needed laptops to work from home or go to school remotely. Some investors believe the pandemic PC boom is over, but AMD, which supplies the processor at the heart of many laptops and desktops, isn’t feeling the decline.

PC sales are reported in AMD’s computing and graphics segment, which increased 33% year over year and was 8% higher than the December quarter. AMD said the increase was driven by both core and graphics processor sales, with the average selling price of Ryzen processors increasing during the quarter.

Cloud server sales are reported in AMD’s Embedded, Enterprise, and Semi-Custom segment, up 88% to $2.5 billion. AMD said the increase was driven by higher sales of server processors, as well as semi-custom sales, which are the chips at the heart of gaming consoles like the Playstation 5.

AMD shares have had a rough 2022, down more than 39% so far, after a spectacular 2021 when sales jumped 68% and gross margin grew as much as 48%. Investors are steering away from semiconductor stocks as the risk of inflation rises.

Last week, Intel gave a disappointing forecast for the June quarter, citing weak PC demand and macroeconomic challenges.

AMD said it completed the Xilinx acquisition in February. The deal was originally announced in 2020 with a price tag of $35 billion. AMD said its results included six weeks of revenue from the deal, and that without Xilinx sales, revenue would have only increased 55% year over year to $5.3 billion.

AMD said it bought back $1.9 billion of its shares during the quarter.

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