Advanced Micro Devices, Inc. (NASDAQ: AMD) reported its first quarter financial results after the market close on Tuesday. The chipmaker surpassed estimates for both revenue and earnings, which sent shares 4.4% higher at the opening bell on Wednesday.
AMD reported earnings of USD 0.06 per share on revenue of USD 1.27 Billion. AMD narrowly beat Bloomberg analysts’ earnings estimates of USD 0.05 per share and anticipated revenue of USD 1.26 Billion.
Despite the beat, AMD’s revenue has now fallen by 23% year-over-year primarily due to lower revenue in its Computing and Graphics segment. Revenue was down 10% sequentially due to lower client processor sales.
AMD’s Computing and Graphic segment revenue was USD 831 Million for the quarter, down 26% year-over-year and 16% quarter-over-quarter. Lower revenue was due to lower graphic channel sales, which was partially offset by increased client processor and datacenter GPU sales.
Client processor average selling price (ASP) was up annually largely due to Ryzen processor sales. However, sequentially, ASP was down due to a decrease in mobile processor ASP.
Enterprise, Embedded, and Semi-Custom segment revenue was USD 441 Million for the quarter, down 17% year-over-year. The segment’s revenue slipped primarily due to lower semi-custom product revenue.
Gross margin was 41% for the quarter, up 5 percentage points year-over-year. The growth was mainly led by AMD ramping up its Ryzen and EPYC processor and datacenter GPU sales.
“We delivered solid first quarter results with significant gross margin expansion as Ryzen and EPYC processor and datacenter GPU revenue more than doubled year-over-year,” said Dr. Lisa Su, AMD president and Chief Executive Officer. “We look forward to the upcoming launches of our next-generation 7nm PC, gaming and datacenter products which we expect to drive further market share gains and financial growth.”
For the second quarter, AMD expects to deliver revenue of USD 1.52 Billion, plus or minus USD 50 Million. AMD expects sequential growth across all its business segments. However, AMD expects year-over-year revenue to flatter due to lower graphics channel sales, negligible blockchain-related GPU revenue, and lower semi-custom revenue.