PROCESSORS BOOST AMD’S SALES AND PROFITS
Chipmaker Advanced Micro Devices on Tuesday announced earnings that beat Wall Street expectations as the company reported 34 percent year-overyear revenue growth that was boosted by demand for its computer processors.
AMD reported $1.48 billion in sales and a profit of $61 million, or 6 cents per share for its fourth quarter.
Analysts polled by Zacks investment research had predicted earnings of 5 cents per share and $1.41 billion in sales.
The company also reported its 2017 full-year financial data. Its revenue was $5.33 billion, $610 million more than its 2016 fiscal year, and it had a profit of $43 million, or 4 cents per share, compared with a $497 million loss in 2016.
AMD is headquartered in California but has most of its senior management team based in Austin and employs about 1,500 people in Central Texas.
The company has been making gains after some years of underperforming.
Industry analysts have said AMD is benefiting from demand for its graphic processor unit, which has widespread use now in the gaming, automotive and blockchain industries.
The company also got a boost in 2017 from the launch of its Ryzen processor chips.
The past year “marked a key inflection point for AMD as we re-shaped our product portfolio, delivered 25 percent annual revenue growth, expanded gross margin and achieved full-year profitability,” AMD CEO Lisa Su said in a written statement. “We are even more excited about 2018 as we launch our next wave of high-performance products and continue to position AMD as one of the premier long-term growth companies in the technology industry.”
A year ago, AMD had reported $1.1 billion in sales and a net loss of $51 million.
After multiple quarters of losses, AMD posted a profit during its third fiscal quarter in 2017.
At the same time, some analysts have cautioned that AMD’s stock, which has risen more than 400 percent since 2016, could be at a premium now and set to drop.
AMD is also still responding to a security flaw in its chips that was unveiled by researchers earlier this month.
AMD said this month that one of the two flaws found, named
Spectre, was applicable to its chips, and that the company was working on fixes. Any effects of the security flaw on AMD sales won’t be known until its next quarterly report.
In a statement Tuesday, AMD said its efforts to prevent and address security flaws could be costly and could lead to other issues.
“For instance, AMD’s mitigation efforts, including the deployment of software or firmware updates to address security vulnerabilities, could result in unintended consequences such as adverse performance system operation issues and reboots,” the company said.
AMD’s stock closed 3.38 percent lower on Tuesday at $12.87 per share. Its shares were initially trading at about 5 percent lower in after-hours trading.
Analysts expect growth for AMD as demand for its new chips in computing, graphics and visualization continues.
Analysts at Zacks have said they expect the company to see $0.13 percent earnings growth during the next five years.
AMD’s stock closed Tuesday at $12.87 per share.
“We are even more excited about 2018 as we launch our next wave of ... products,” said AMD CEO Lisa Su.