AMD Shares Slip On Weak Q4 Forecast

amd shares

Despite a third-quarter earnings report that met most analysts estimates, shares of Advanced Micro Devices slumped by more than 10% after the semiconductor company gave a weak earnings outlook for their fourth fiscal quarter.

AMD which was expected to deliver positive earnings for the third fiscal quarter posted earnings of ten cents per share beating most analysts estimates of eight cents per share. AMD also had a net income of 7 cents per share or $71 million for the quarter that ended in September, a significant improvement compared to their loss of $406 million or fifty cents per share from the same period last year.

For the third quarter, AMD’s revenue is up by 25.7% to $1.64 billion topping most estimates of $1.51 billion. The company’s sales from its graphics and computing business rallied by 73.5% to $819 million. This quarter the company’s sales for their Ryzen processors have boosted their revenues by more than 25%.

AMD chief executive officer Lisa Su commented on their upbeat earnings stated that the strong customer adoption of their latest high-performance products have led to a significant growth in their revenue as well as an improved financial result compared to the same quarter last year.

“Our third quarter new product introductions and financial execution mark another important milestone as we establish AMD as a premier growth company in the technology industry.” she added.

During the previous quarter, the company’s revenue rose by 19% to $1.22 billion which was also above most analysts estimates. AMD’s core processing business also contributed a 51.% growth in the revenue to $659 million for the second quarter.

The company was then projected to post upbeat earnings for the third quarter due to the renewed demand for their GPU products and processors are driven by the rise of cryptocurrency miners. Prices of the aforementioned products then were projected to rise as well providing an outlook for semiconductor producers to grow in the coming quarters.

However, AMD gave a negative earnings outlook for the coming fourth quarter that sent its shares down by more than 10%. Although their latest Ryzen and Epyc chips, as well as the recently released Vega graphics chips, are still slated to receive demand, AMD forecasted their revenue might decline in the coming quarter as the demand brought by cryptocurrency might also die down a bit. According to AMD, its fourth-quarter revenue might go down by around 12% to as much as 18% compared to their most recent earnings report. Some investors commented that this decline might be too deep especially during the holiday quarter.

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