Advanced Micro Devices, Inc. (AMD) Stock Tanks After Earnings Results

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AMD released its latest earnings report after closing bell tonight, posting adjusted losses of 4 cents per share or $38 million on $984 million in revenue. Analysts had been looking for losses of 4 cents per share on $984.38 million in revenue. In last year’s first quarter, the chip maker reported losses of 12 cents per share or $96 million on $832 million in sales.

AMD’s loss narrows

Advanced Micro Devices reported a GAAP loss of 8 cents per share or $73 million, compared to GAAP losses of 14 cents per share or $109 million in the same quarter a year ago. Management said demand for AMD’s new Ryzen CPUs and graphic processors drove the 18% increase in sales. The company’s GAAP and non-GAAP gross margins each rose 2 points year over year to 34%.

AMD’s Computing and Graphics segment sales rose 29% to $593 million on the back of an increase in desktop and graphics processors. Enterprise, Embedded and Semi-Custom revenue rose 5% year over year due to higher semi-custom system-on-a-chip sales.

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During the first quarter, the chip maker launched its new x86 Ryzen desktop processor based on the new Zen core microarchitecture. The company said its high-performance x86 server CPU code-named Naples beats the current top competitor offering on “critical parameters” and its Vega GPU architecture is on track to launch in the second quarter.

Advanced Micro Devices provides guidance

For the second quarter, AMD expects sales to grow by about 17% quarter over quarter, plus or minus 3 percentage points. At the midpoint, this would represent about a 12% increase in sales year over year.

“We are positioned for solid revenue growth and margin expansion opportunities across the business in the year ahead as we bring innovation, performance, and choice to an expanding set of markets,” AMD President and Chief Executive Officer Dr. Lisa Su said in a statement.

Shares of AMD stock plunged by as much as 7.49% to $12.60 in after-hours trades.

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