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AMD Is Also Benefiting From a More Stable PC Market

January 31, 2017

General Views Inside Computex 2014General Views Inside Computex 2014
The AMD booth at the Computex Taipei 2014 expo in Taiwan.Photograph by Chris Stowers — Bloomberg/Getty Images

Advanced Micro Devices on Tuesday posted a smaller-than-expected quarterly loss and gave a strong revenue forecast for the current quarter, boosted by demand for its graphic chips used in gaming consoles and a stabilizing PC market.

The company’s next hotly awaited release is the new Ryzen processors for PCs, aimed at gamers and others who need a high-performance processor as well as dislodging Intel‘s near monopoly.

AMD (AMD) has said in October that it expects to release the processor in the first half of this year. Deutsche Bank had said in a note on Monday that sales in the quarter could be hit as customers hold off till the new processor is launched.

But not only did the Sunnyvale, California-based chipmaker give a strong forecast, it also posted a healthy revenue increase for the fourth quarter.

AMD’s shares, which have surge more than 370% in the last twelve months, were up 4.5% at $10.84 after the bell on Tuesday.

AMD said it expects first-quarter revenue to increase 18% at the midpoint of its forecast range.

Analysts on average were expecting revenue to rise 15.7%, gaining for the fourth quarter in a row, according to Thomson Reuters (TRI).

AMD’s revenue increased a better-than-expected 15.4% to $1.11 billion in the quarter ended Dec. 31, beating analysts’ estimates for the sixth quarter in a row.

Net loss narrowed to $51 million, or six cents per share, from $102 million, or 13 cents per share, a year earlier. Excluding items, AMD lost 1 cent per share.

Analysts on average were expecting a loss of two cents and revenue of $1.07 billion, according to Thomson Reuters.

AMD said sales rose 3.7% at its unit that makes processors for servers and gaming consoles. The unit makes chips used in Microsoft’s Xboxs (MSFT) and Sony’s PlayStations (SNE).

The company’s sales in its unit that makes processors such as the Polaris chips used in PCs jumped nearly 28%.

Last week, Intel (INTC) reported better-than-expected quarterly revenue and profit, driven in part by a stabilizing PC market.

AMD faces stiff competition from NVIDIA (NVDA) in the gaming market and from Intel in the PC market.