Advanced Micro Devices (NASDAQ: AMD) reported its third quarter financial results after the closing bell on Tuesday. The Company reported in-line earnings, but topped analysts’ revenue estimates. However, shares edged lower by 3% after AMD reported a weaker-than-expected guidance.
For the quarter, AMD reported earnings of USD 0.18 per share on revenue of USD 1.8 Billion. Analysts expected earnings of USD 0.18 per share on revenue of USD 1.65 Billion.
Revenue during the quarter rose by 9% year-over-year, driven by stronger sales of 7nm Ryzen, Radeon, and EPYC processor sales. However, revenue growth was partially offset by lower revenue in the Enterprise, Embedded, and Semi-Custom segment.
Computing and graphic segment delivered revenues of USD 1.28 Billion, up 36% year-over-year. The segment was driven by higher sales of AMD’s Ryzen client processor.
Client processor average selling price (ASP) increase year-over-year, driven by Ryzen desktop processor sales. The sequential increase as driven by both Ryzen desktop and mobile processor sales.
Enterprise, Embedded, and Semi-Customer segment revenue was USD 525 Million, down 27% year-over-year and 11% sequentially. The year-over-year decrease was primarily due to lower semi-custom product revenue, but was partially offset by higher EPYC processor sales.
“Our first full quarter of 7nm Ryzen, Radeon and EPYC processor sales drove our highest quarterly revenue since 2005, our highest quarterly gross margin since 2012 and a significant increase in net income year-over-year,” said Lisa Su, AMD President and Chief Executive Officer.
“I am extremely pleased with our progress as we have the strongest product portfolio in our history, significant customer momentum and a leadership product roadmap for 2020 and beyond,” concluded Su.
Based on the third quarter results, AMD is expecting revenue to be approximately USD 2.1 Billion, plus or minus USD 50 Million, representing a 48% increase year-over-year. Again, AMD expects fourth quarter sales to driven by Ryzen, EPYC, and Radeon product sales. Despite the year-over-year increase, AMD’s forecast is below Refinitiv analysts’ estimates of USD 2.15 Billion.