AMD Posts Disappointing Earnings but Stock Rises 4% on Data Center Optimism

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] American semiconductor company AMD announced its earnings for July to September on the 1st (local time), which fell short of market expectations. Although the results were weaker than expected due to a decline in PC demand, the stock price rose in after-hours trading following predictions that the server semiconductor business used in data centers will grow.

According to CNBC and other broadcasts, AMD reported that its revenue for the third quarter of fiscal year 2022 (June 26 to September 24) was $5.57 billion (approximately 7.9 trillion KRW). This represents a 29% increase compared to the same period last year but falls short of the market estimate of $5.62 billion. Earnings per share were 67 cents, below the market expectation of 68 cents.

AMD stated that the decline in PC demand is affecting its performance. The client business unit, which covers the PC segment, recorded third-quarter revenue of $1 billion, a 40% decrease compared to one year ago. On the other hand, revenue from the data center segment was $1.64 billion, a 45% increase compared to the previous year.

AMD lowered its full-year revenue forecast from the initial $26.3 billion to $23.5 billion. The expected adjusted gross margin was revised from the August forecast of 54% to 52%.

Lisa Su, AMD’s Chief Executive Officer (CEO), said that as customers reduce inventory, the volume of component shipments is decreasing, and she expects PC demand to weaken further in the fourth quarter (October to December) of this year. She added, "We believe we will continue to gain market share in the data center market."

AMD closed regular trading on the day of the earnings announcement down 0.67% at $59.66. However, in after-hours trading following the earnings release, the stock rose more than 4%.

This content was produced with the assistance of AI translation services.