AMD’s stock drops after earnings as revenue outlook comes in light

On an adjusted basis, AMD
AMD,
+2.41%
earned 70 cents a share, up from 67 cents a share a year before, while analysts tracked by FactSet were expecting 68 cents a share.

Revenue increased to $5.80 million from $5.57 billion a year before, while the FactSet consensus was for $5.70 billion.

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Data-center revenue came in at $1.6 billion, flat with the year-earlier sum and in line with the FactSet consensus, as AMD saw growth from its 4th Gen Epyc central processing units but declines in adaptive system-on-ship (SoC) data-center products.

Revenue for that segment was up 21% sequentially, however. “Our data-center business is on a significant growth trajectory based on the strength of our Epyc CPU portfolio and the ramp of Instinct MI300 accelerator shipments to support multiple deployments with hyperscale, enterprise and AI customers,” Chief Executive Lisa Su said in a release.

AMD posted $1.5 million in client-segment revenue, up 42% from a year before amid strength in Ryzen mobile processors. The FactSet consensus was for $1.2 billion.

Gaming revenue fell 8% to $1.5 billion and matched the FactSet consensus.

The company also saw $1.2 billion in embedded sales, down 5% from a year before and slightly below the FactSet consensus of $1.3 billion.

For the fourth quarter, AMD models $5.8 billion to $6.4 billion in revenue, while analysts were looking for $6.4 billion. The company also expects an adjusted gross margin of about 51.5%, which compares with 51% in the third quarter.

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