AMD shares are down roughly 32% so far this year.
Dreamstime
AMD
reported better-than- expected earnings results Tuesday afternoon, but the company forecast less revenue than expected for its September quarter. Its shares fell in after-hours trading.
The semiconductor company reported second-quarter adjusted earnings per share of $1.05, compared to Wall Street’s consensus estimate of $1.03, according to FactSet. Revenue came in at $6.6 billion, which was above analysts’ expectations of $6.53 billion. But AMD guided the current quarter to a range with $6.7 billion in sales at the midpoint versus the $6.84 billion analysts’ estimate.
Overall industry demand for computers has been softening. Worldwide shipments for personal computers fell 15% in the June quarter from a year earlier, IDC reported last month. The research firm attributed the drop to “macroeconomic headwinds,” such as rising inflation, as well as supply-chain disruptions.
AMD shares initially fell as much as 5% in late trading following the release.
This is breaking news. Read a preview of AMD earnings below and check back for more analysis soon.
Semiconductor analysts predict AMD will get hit by weakening industry demand for personal computers. But the chip maker’s gains against main rival Intel could soften the blow.
Investors will get a key update on chip maker’s businesses when AMD reports earnings today after the market close.
The Wall Street consensus estimates for
Advanced Micro Devices
(ticker: AMD) for the June quarter is revenue of $6.53 billion with adjusted earnings per share of $1.03. Analysts’ estimates for the current quarter’s revenue is $6.84 billion.
Overall industry demand for computers has been softening, which hurts AMD. Worldwide shipments for personal computers fell 15% in the June quarter from a year earlier, IDC reported last month. The research firm attributed the drop to “macroeconomic headwinds,” such as rising inflation, as well as supply-chain disruptions.
more to read
Last week, Intel posted June-quarter financial results that fell far short of Wall Street estimates. Tellingly, the company said its data-center server chip business would grow slower than the overall data-center market for the next two years.
Wall Street believes Intel’s admission of coming share losses will likely be good news for AMD.
On Monday, Susquehanna analyst Christopher Rolland analyst reaffirmed his Positive rating on AMD. “Despite Intel’s challenged print, we think AMD will fare much better, but PC may not be immune,” he wrote. “Given supply constraints and strong competitive position, we remain bullish on AMD Server [business].”
Earlier this week, KeyBanc Capital Markets analyst John Vinh also reiterated his Overweight rating on AMD. “We continue to see AMD benefiting from strong demand in U.S. cloud data center,” he wrote.
AMD shares were down 32% year to date as of midday trading on Monday. For the same period the
iShares Semiconductor ETF
(SOXX), which tracks the performance of the ICE Semiconductor Index, has declined 24%.
Write to Tae Kim at tae.kim@barrons.com
