Advanced Micro Devices (AMD) misses analysts sales target in the third quarter

Advanced Micro Devices (AMD) misses analysts sales target in the third quarter
  • AMD reports $1.80 billion revenue for the third quarter against analysts forecast of $1.83 billion.
  • Earnings per share were reported at 18 cents a share (adjusted).
  • AMD’s sales have hiked 9% while a 38% gain has been noted in earnings. (Year over year)
  • ADM's stock fell over 2% on Tuesday, and was seen trading at $32.68 in after-hours trading.

The Santa Clara, California-based multinational semiconductor company, Advanced Micro Devices (AMD) released its earnings report for the third quarter late on Tuesday. While the chipmaker has hit Wall Street’s forecasted target for earnings, Q3 sales have come short of the estimate. As per the sources, the report has caused AMD’s stock to fall in after-hours trading.

Figures For Sales And Earnings Per Share

The report highlights 18 cents of adjusted earnings per share for Advanced Micro Devices. Total sales for the September quarter have been reported at $1.8 billion. Analysts forecast had predicted identical earnings but total sales were expected to hit the $1.83 billion mark. In terms of year-over-year, the report further adds, AMD’s sales have hiked 9% while a remarkable 38% gain has been noted in earnings.

In a news release late on Tuesday, Lisa Su, the current Chief Executive of AMD remarked:

Our first full quarter of 7-nanometer 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”.

Officials from AMD have also expressed their commitment towards increasing the total sales in the fourth quarter to $2.1 billion. Hitting this target will mark a 48% increase in sales as compared to the fourth quarter of 2018. The target for Q4’s earnings per share, however, wasn’t divulged. According to Wall Street’s estimate, $2.16 billion of sales should print 32 cents per share of earnings for AMD.

Response In The Stock Market

Following the report, AMD stock was seen undecided in the after-hours trading on Tuesday. While it declined 2% during the day and closed at $33.03, after posting a few gains and losses in after-hours trading, it was reported settling further down around $32.68.

IBD MarketSmith has recently pointed at the cup base that AMD stock is currently making. The buy point is located at $35.65. While AMD’s other businesses have printed lower revenue in the third quarter, increased sales in graphics chips and PCs rescued the overall figure for revenue and balanced it out.

As of Tuesday, AMD’s stock has gained 80% year-to-date. Operating income for the third quarter has been posted at $186 million. The figure for Q3 of 2018 was $150 million, which marks a 24% increase as compared to last year. Other than that, the Q3 earnings report highlights a net income of $120 million for AMD that has climbed 17.65% from last year’s figure of $102 million.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.
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