AMD Misses Expectations in Fiscal Q3 2022 Earnings Report

UTC by Ibukun Ogundare · 3 min read
AMD Misses Expectations in Fiscal Q3 2022 Earnings Report
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For the coming quarter, AMD is looking forward to approximately $5.5 billion in revenue. 

After a surge in computer sales last year, semiconductor company Advanced Micro Devices or AMD (NASDAQ: AMD) has plummeted, according to its fiscal Q3 2022 earnings report. The company realized $66 million in quarterly profits on about $5.6 billion in revenue. The figure represents a 93% decline in profits YoY, compared to $823 million reported in Q3 2021 on $4.3 billion in revenue.

The company’s stock is up more than 4% in the pre-market today and its shares are trading at around $62.20.

AMD Announced Q3 2022 Financial Results

Basically, AMD missed analysts’ expectations in its Q3 2022 financial performance. Adjusted earnings per share were 67 cents, while Wall Street expected 68 cents. Revenue also fell below analysts’ projections of $5.62 billion at $5.57 billion. AMD Chair and CEO Dr. Lisa Su blamed the Q3 2022 earnings on the softening PC market. He also mentioned lower substantial inventory action on the PC supply chain.

“Despite the challenging macro environment, we grew revenue 29% year-over-year driven by increased sales of our data center, embedded and game console products. We are confident that our leadership product portfolio, strong balance sheet, and ongoing growth opportunities in our data center and embedded businesses position us well to navigate the current market dynamics.”

Operating loss in the three-month period that ended on the 24th of September was $64 million. Meanwhile, the company saw an operating income of $948 million or 22% of revenue in the previous year. Separately, higher revenue and gross margin partially offset by higher operating expenses contributed to a Non-GAAP operating income of $1.3 billion. Diluted earnings per share also reduced from $0.75 a year ago to $0.04.

According to AMD, the semiconductor company generated $1.61 billion in revenue during the fiscal Q3 2022. Profits from the segments grew 45% but missed the StreetAccount consensus of $1.64 billion. Furthermore, the company said it would launch its Epyc data center chips on the 10th of November. Su revealed:

“We’ve had very good progress at the North American cloud vendors and we continue to believe that although there may be some near-term, let’s call it optimization, of, let’s call it individual footprints and efficiencies at individual cloud vendors. Over the medium term. As we go into 2023, we expect growth in that market, particularly customers moving more workloads to AMD, just given the strength of our products portfolio and overall general coming forward.”

AMD’s Forward-Looking Statement

For the coming quarter, AMD is looking forward to approximately $5.5 billion in revenue.

“For the full year 2022, AMD expects revenue to be approximately $23.5 billion, plus or minus $300 million, an increase of approximately 43% over 2021 led by growth in the Embedded and Data Center segments. AMD expects non-GAAP gross margin to be approximately 52% for 2022,” the company added.

Other chip companies like Intel Corporation (NASDAQ: INTC) have also been experiencing losses, with profits declining 85% YoY in the third quarter. As a matter of fact, the company is considering cutting expenses, which may include dismissing part of its workforce.

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