Advanced Micro Devices Inc announced it’s stronger than expected quarterly results largely because of the record revenue growth in data center business and also came up forecasting higher than Wall Street expected revenue in fiscal 2019.
Chipmaker AMD was expected by investors to be showing weaker results as other chipmakers were warned by one of their major host about a slowdown in China arising from a trade war between the United States and China.
In fourth quarter, gross margin of AMD saw a rise of 38 percent which rose to 34 percent in the same quarter a year ago. For 2019, company is expecting adjusted gross margin of more than 41 percent which would be highest level by the company in nearly eight years.
The investors will be relieved to some extent for more flexible gross margin outlook; and in the high-margin market of data servers, AMD is better equipped to get its market share from Intel especially in second half of 2019, said KinNgai Chan at Summit Insights Group LLC.
Surpassing the FactSet analyst average estimate of $939 million, AMD’s sales rose over 8.5 percent to $986 million at its computing and graphics segment including graphic chip sales to data centers.
Excluding items, AMD’s earning per share remained 8 cents and that leveled analysts’s estimates but the company missed expected revenue of $1.45 billion and generated revenue of $1.42 billion in the reported quarter.
For the current quarter AMD forecasted revenue of $1.20 billion to $1.30 billion which is 24 percent less from the revenue of last year in the same quarter, while analyst were expecting $1.47 billion for the same.
The company’s has forecasted lower than analysts’ estimates for the first-quarter revenue, which come concerning macro uncertainties in first half of the year and for headwinds in the graphic segment , said AMD’s chief executive officer, Lisa Su.