AMD Chairman and CEO Lisa Su speaks at the AMD Keynote during the Consumer Electronics Show (CES) on January 4, 2023 in Las Vegas, Nevada.

Robyn Beck | AFP | Getty Images

AMD reported fourth quarter results on Tuesday beat Wall Street expectations for sales and profit, but analysts guided for a 10% year-over-year sales decline in the current quarter.

The stock rose over 3% in extended trading.

Here’s how the company did compared to Refinitiv’s consensus estimates for the quarter ended in December:

  • Earnings per share: $0.69, adjusted, compared with $0.67 per share expected
  • Revenue: $5.6 billion, compared with expectations of $5.5 billion

AMD said it expected $5.3 billion in sales for the current quarter, slightly lower than a Refinitiv estimate of $5.47 billion. AMD’s estimate suggests a 10% drop in sales in the current quarter. It also said it expected its adjusted gross margin to be around 50%, a key metric for chipmakers like AMD.

AMD reported earnings as many of its rival chipmakers have stumbled in recent weeks, citing lower consumer demand for finished electronics and volumes of parts needed to make computers and servers. Intel, AMD’s main competitor, reported a disastrous neighborhood last week that included a weak outlook for 2023.

While AMD said it saw slow sales of its PC chips and GPUs, it said its data center segment grew 42% year-over-year, suggesting it was taking market share from Intel.

AMD attributed its blow to strong growth in its embedded and data center businesses and said its customer revenue, or chips for PCs and notebooks, and its gaming segment declined.

AMD’s data center segment grew 42% year-over-year to $1.7 billion. Its embedded segment grew 1,868%, AMD said, due to sales from the purchase of Xilinx.

But their customer base, which includes sales from PC processors, fell 51% year-on-year due to a weak PC market, AMD said. It added that its customers have too much inventory of its chips, a theme other semiconductor companies have mentioned in recent weeks.

AMD’s gaming business, which consists of graphics cards and chips for game consoles, was down 7% year-over-year. The decline came from graphics cards and was offset by “semi-custom” revenue, which is how the company reports sales from chips for gaming systems like the PlayStation 5.