AMD forecasts current-quarter revenue largely below estimates
2022.08.03 02:01
FILE PHOTO: Signs of AMD are seen at the China Digital Entertainment Expo and Conference, also known as ChinaJoy, in Shanghai, China July 30, 2021. REUTERS/Aly Song GLOBAL BUSINESS WEEK AHEAD
By Yuvraj Malik and Jane Lanhee Lee
(Reuters) -Advanced Micro Devices Inc on Tuesday forecast third-quarter revenue slightly below Wall Street estimates, and the chip designer’s shares fell 5%.
The company expects revenue of $6.7 billion, plus or minus $200 million, for the current quarter compared to analysts’ estimate of $6.82 billion, according to IBES data from Refinitiv.
Runaway inflation and the reopening of offices and schools have led people to spend less on personal computers (PCs) than they did during lockdowns, hurting companies like AMD, which is among the largest suppliers of central processing units (CPUs) and graphics processing units (GPUs) chipsets.
Chipmakers also are under pressure from a spate of COVID curbs in China – an important PC market – and the Ukraine war, which have worsened supply-chain snarls and dragged demand further. Global shipments of PCs are expected to drop 9.5% this year, according to IT research firm Gartner (NYSE:IT).
Those pressures led to lower-than-expected earnings and forecast from Intel Corp (NASDAQ:INTC). last week.
“In contrast to Intel’s big miss last week, AMD actually delivered a solid quarter, solidifying its spot as an increasingly prominent player within both the high-performance PC and data center CPU market,” said Jesse Cohen, senior analyst at Investing.com.
YipitData research director Nathaniel Harmon said AMD has been gaining market share in the data center and cloud market at Intel’s expense, while Intel has been losing 1-2 percentage points of share each quarter since the first quarter of 2019.
AMD expanded its full-year forecast to a range of $26 billion to $26.6 billion, compared to about $26.3 billion earlier. Analysts had forecast $26.18 billion.
Second-quarter revenue jumped 70% to $6.55 billion, inching past analysts’ estimate of $6.53 billion.
Adjusted earnings for the second quarter was $1.05 per share, topping analysts’ estimates by 2 cents.
