Advanced Micro Devices (NASDAQ:AMD) announced on Tuesday its recent quarterly results. While the stock has been doing extraordinarily well over the past year, handily outperforming major indexes, this recent quarter’s worth of financial results ended up missing Wall Street expectations. However, it wasn’t as bad as some would suggest.
The company said that it expects revenues between $1.75 billion to $1.85 billion in the first quarter, which falls a little shy of the $1.86 billion forecasted by analysts. While a bit disappointing, the company did manage to beat Wall Street’s estimates in terms of revenue figures for the quarter, reporting Q4 income of $2.13 billion. This slightly edged out on the $2.11 billion expected by analysts and is a big increase from the $1.42 billion reported a year ago.
One closely watched area for AMD is its data-center sales, which has the potential to be a major driver of revenue growth in the future. The company had been trying to get back into the server market, although the process would involve challenging its rival Intel, which reported strong data-center sales last week in its quarterly results.
During a conference call on Tuesday, AMD President and CEO Lisa Su said data-center sales were responsible for a “mid-teens” percentage of revenue for the quarter, saying that “we are very focused on continuing to grow share the data-center market, and we feel good about our midyear market share targets. From our standpoint, we see it as a good market environment for data center in both cloud as well as enterprise. When we look at our full-year revenue guide of approximately 28% to 30% for the year, the highest growth from percentage standpoint will obviously be servers.”
One big disappointment for the company came from its gaming-console chip sales, which have been falling as gamers anticipate the release of the next generation of gaming consoles. Management ended brushing aside these worries, claiming them to be normal when the next-generation gaming consoles are close to coming out.
Shares of AMD ended the day actually giving back some its value, sliding down 5.4% in after-hours training. Over the past year, the company has done particularly well for itself, seeing its stock price more than double since January 2019. Despite this, most Wall Street analysts covering the stock remain neutral on its prospects.
There are 20 analysts who have a neutral “hold” position on the company, compared to only 15 who have a “buy” rating and just 3 who have a “sell.” While these quarterly results are a little disappointing, it doesn’t seem likely that this will be the start of a major reversal in 2020.
AMD Company Profile
Advanced Micro Devices designs and produces microprocessors and low-power processor solutions for the computer and consumer electronics industries. The majority of the firm’s sales are in the computer market via CPUs and GPUs. AMD acquired graphics processor and chipset maker ATI in 2006 in an effort to improve its positioning in the PC food chain. In 2009, the firm spun out its manufacturing operations to form a foundry joint venture, GlobalFoundries. – Warrior Trading News
