Market views on Advanced Micro Devices (AMD) earnings forecasts
In the company's 2022 3Q (July-September) financial results, sales were 5.57 billion dollars, up 29% from the same period last year, and non-GAAP adjusted EPS fell 8% to 0.67 dollars. Both sales and EPS fell slightly below market expectations. In terms of sales, the data center division saw a 45% increase in sales (1.61 billion dollars), and while EPYC processors were doing well, it looks like the US market compensated for the decline in CPU demand for China. In the gaming division, sales increased 14% to 1.63 billion dollars, and chipsets for PS5 and the new Xbox performed well against the backdrop of special demand during the year-end sales season, covering the slump in PC GPUs. In the embedded (embedded semiconductor) division, sales increased 16.5 times to 1.3 billion dollars, and the Xilinx business acquisition contributed greatly. Meanwhile, the client division, which was the main force, fell 40% to 1.02 billion dollars, and the decline in shipments of CPUs for personal computers had a big impact.
In terms of profit and loss, the embedded division's operating profit was 635 million dollars, a major breakthrough from 23 million dollars in the same period last year. Data center operating profit increased 64% to 500 million dollars. The client division lost $26 million in operating income ($490 million in operating profit for the same period last year). The gaming division's operating profit fell 39% to 140 million dollars. Other operating losses were $1.32 billion, of which amortization of intangible fixed assets related to the Xilinx acquisition was $1.0 billion. The overall operating margin was 23%, a decrease of only 1 percentage point compared to the same period last year.
In terms of profit and loss, the embedded division's operating profit was 635 million dollars, a major breakthrough from 23 million dollars in the same period last year. Data center operating profit increased 64% to 500 million dollars. The client division lost $26 million in operating income ($490 million in operating profit for the same period last year). The gaming division's operating profit fell 39% to 140 million dollars. Other operating losses were $1.32 billion, of which amortization of intangible fixed assets related to the Xilinx acquisition was $1.0 billion. The overall operating margin was 23%, a decrease of only 1 percentage point compared to the same period last year.
Regarding the full-year earnings forecast for 2022, the company expects sales to be 23.5 billion dollars, and it was revised downward from the corporate plan of 26.3 billion dollars announced in August. Incidentally, the market forecast was 23.88 billion dollars. Also, the adjusted gross profit margin forecast was reduced from 54% in August to 52%.
Based on the company's 22/3Q financial results, while the data center division and embedded division are expected to continue to perform well, global PC demand continues to be sluggish, and the slump in the client sector is expected to continue. As data center growth affects the company's market share expansion, room for growth in the gaming sector is expected.
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