AMD posts beat on revenue, EPS

AMD reported earnings that topped Street estimates. The tech company posted $3.24B in revenue and $.52 in adjusted EPS, compared to estimates of $3.03B in revenue and $.47 EPS. Yahoo Finance’s Jared Blikre joined Yahoo Finance Live with the details.

Video Transcript

ADAM SHAPIRO: And welcome back to Yahoo Finance Live. We have more after the bell earnings for you. Advanced Micro Devices is out. Jared Blikre, shares of trading up post-bell, up about 3.6%.

JARED BLIKRE: That is right. We've got some nice beats here, too, and much like Microsoft, just around a record high here for AMD, flirting with that $99, $100 level. So let's go through the numbers. Fourth quarter results, adjusted EPS came in at $0.52 versus estimates of $0.47. And that's an increase of $0.32 year over year. And revenue, big beat, up $3.24 billion. Estimate was for lower at $3.03 billion. That is an increase of 53% year over year, a lot of that coming from Intel. We'll take a look at that stock in a second here.

And then, computer and graphics revenue, that came in at $1.96 billion, up 18% quarter over quarter. The estimate was for lower at $1.82 billion. And then, their margins, adjusted gross margin coming in at 45%. Estimate was for just slightly higher, 45.1%. We're going to call that even here. And then, their first quarter forecast, they're seeing revenue of $3.2 billion. That's much higher than the $2.73 billion range that the Street was expecting here.

So big beats on both the top and bottom lines. Stock is up about 3 and 1/2% in the after hours here. And just taking a look at our heat map here for semiconductors, we can see Intel down about half a percent. So what AMD gains, one more time, Intel loses. But for the most part, you can see these little green quotes here. These are, in fact, positive signs for the industry. So for most of these stocks, AMD boosting them in after hours trading here after earnings.

SEANA SMITH: Hey Jared, I know you closely watch a lot of these semiconductor names, but it looks like a very strong quarter here from AMD. Their guidance also very positive here for investors. But what do you think analysts are going to be, I guess, zoning in on or really want to hear from executives on this call that's expected to get underway in just a few minutes?

JARED BLIKRE: Well, you know, AMD is one of those old school manufacturers. They actually fabricate their own chips. Given the direction that Intel has taken, I would be interested in knowing if AMD would go the same direction. Now, they have actually been able to produce their own seven-nanometer chips, something that Intel has so far not been able to do. So they're far ahead in that department.

But I'd also like to get any kind of indication of what corporate IT spending is like right now. We know people are buying more laptops and computers and upgrading them, but what are the corporations doing, putting in those big orders, the people who buy the servers and whatnot? So that would be where my focus would be.

ADAM SHAPIRO: So wouldn't that, though, Jared, be potentially a future hiccup for them going forward, as companies start to look at alternative?

JARED BLIKRE: Yeah, well, I-- so there's a competition aspect, and that's always going to be a big one. Liken it to what AMD gains, Intel loses, and vice versa. But there's also the pull forward in demand. How much of there-- how much of that was there in the trailing year? For instance, as people upgraded their machines.

But I think going forward, it's a toss-up. The chip sector is going to be in demand because everything is being disrupted right now, from 5G, intelligent cities, autonomous driving. There's no shortage of places where these chips are going to go. And I should mention Texas Instruments, which just released around the bell. That set a record high as well. They put some of the smaller chips that you would have in an auto or your calculator.

I would say the industry is firing on all cylinders, and it's no coincidence that over the last year, they have really been one of the major engines of tech. So when the FAANG stocks have stalled, when software has stalled, chip stocks for the most part making up the slack.

ADAM SHAPIRO: Jared Blikre, thank you.