Chipmaker Advanced Micro Devices (AMD) late Tuesday cleared Wall Street’s hurdles for the fourth quarter but set a lower bar for the current period. Still, AMD stock rose in extended trading on strong data center chip sales.
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The Santa Clara, Calif.-based company earned an adjusted 69 cents a share on sales of $5.6 billion in the December quarter. Analysts polled by FactSet had expected AMD earnings of 67 cents a share on sales of $5.51 billion.
On a year-over-year basis, AMD earnings fell 25% while sales rose 16%. The acquisition of Xilinx boosted revenue and helped offset declining PC and gaming chip sales.
In the fourth quarter, AMD’s PC chip sales dropped 51% year over year to $903 million amid weak personal computer demand. Gaming segment revenue slid 7% to $1.6 billion.
Meanwhile, data center chip sales increased 42% to $1.7 billion, driven by Epyc server processors.
AMD Stock Rises After Report
For the current quarter, AMD predicted sales of $5.3 billion, down 10% year over year. Analysts were looking for $5.5 billion in the first quarter.
In after-hours trading on the stock market today, AMD stock advanced 2.7% to 77.20. During the regular session Tuesday, AMD stock climbed 3.7% to close at 75.15.
“Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated product portfolio,” Chief Executive Lisa Su said in a news release.
AMD stock ranks No. 13 out of 34 stocks in IBD’s fabless semiconductor industry group, according to IBD Stock Checkup. It has a so-so IBD Composite Rating of 70 out of 99. The Composite Rating scores a stock’s key growth metrics against all other stocks regardless of industry group.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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