|Metric||Beat/Miss/Match||Reported value||Analyst prediction|
|Earnings per share||To beat||$1.05||$0.91|
|Revenue from Enterprise, Embedded and Semi-Custom segments||To beat||$2.8||$2.7|
Financial Results of Advanced Micro Devices: Analysis
Advanced Micro Devices, Inc. (AMD) reported Q2 2022 results mixed compared to analysts’ expectations. Earnings per share (EPS) significantly exceeded estimates and revenue from the enterprise, embedded and semi-custom segments also exceeded analysts’ forecasts. Total revenue increased 70% year-over-year (YOY), in line with expectations. This increase was driven by growth in all segments, but also by the inclusion of Xilinx revenues.
AMD’s new segments
In the second quarter, AMD began using a new set of revenue segments in light of AMD’s diversification away from its traditional business of providing graphics processing units (GPUs) and processors to desktop and desktop computers. laptops. This has been spurred by increased demand from data centers due to the rise of cloud computing and the increase in the number of chips embedded in various products such as cars. AMD’s newest segments are Gaming, Client, Data Center and Embedded. The first two segments are for its consumer GPU and CPU business. Data center is AMD’s sales to large data centers, such as those in cloud computing platforms, and embedded chip overs used in other products such as cars.
Data Center segment revenue was $1.5 billion, up 83% year-over-year in the second quarter of Fiscal 2022. in the customer segment was $2.2 billion, up 25% year-on-year, driven by mobile processor sales. Gaming segment revenue was $1.7 billion, up 32% year-on-year, driven by higher semi-custom product sales. Embedded segment revenue increased 2,228% year-on-year, driven by the inclusion of Xilinx’s embedded revenue.
AMD’s former Enterprise, Embedded, and Semi-Custom segment roughly covered new data center, embedded, and semi-custom chips in its gaming segment. comes from semi-custom chips, only data center and embedded segment revenue of $2.8 billion has already exceeded the consensus expectation of $2.7 billion for the former combined segment.
AMD Outlook and Stock Performance
In its earnings release, AMD said it expects revenue for the third quarter of fiscal 2022 to be around $6.7 billion, plus or minus $200 million. This would represent an increase of around 55% year-over-year. The company expects fiscal 2022 revenue to be around $26.3 billion, plus or minus $300 million. That would be an increase of around 60% over 2021.
AMD stock rose about 2.9% in extended trading hours after the publication of the results, at the time of this writing. AMD has underperformed the S&P 500 over the past year, returning -8.6% compared to -6.8% for the S&P 500.
AMD Earnings Call Recap
In the quarterly report, AMD’s Chairman and CEO (CEO) Dr. Lisa Su said the company achieved its eighth consecutive quarter of record revenue. She attributes this to “strong execution and an expanded product portfolio.”
Su, on a conference call with analysts after the earnings release, was increasingly pessimistic about PC demand. She said AMD expects PC business to drop into the “mid-teens” percentage range, which is steeper than three months ago, when she expected to a decline in the single-digit percentage range this year. Su’s outlook today is more pessimistic than that of rival Intel.
AMD’s next earnings report (for the third quarter of fiscal 2022) is scheduled for release on October 25, 2022.