Advanced Micro Devices, Inc.(NASDAQ:AMD) stock fell over 8.3% on Jan 27th, 2021 (As of 9:50 am GMT-5; Source: Google finance) despite decent results for the fourth quarter of FY 20. Gross margin was 45 percent, flat year-over-year and up 1 percentage point quarter-over-quarter
The biggest highlight for AMD for fourth quarter was its enterprise segment which was up 176% year-over-year and up 13% from last quarter to $1.28 billion. This is due to its semi-custom sales, which is what it calls its console chip business, and also due to strong demand for the current generation of Sony and Microsoft consoles. It also said that its server revenue grew on a sequential basis. AMD’s business selling processors and graphics chips for PCs, which it calls Computing & Graphics, also delivered strong results, growing 18% year-over-year to $1.96 billion. That was driven by an increase in processor sales. AMD had launched new processors and graphics chips last fall that have been consistently sold out. It said that its desktop CPU revenue rose on an annual basis, suggesting that its Ryzen CPUs are competing fiercely with Intel for market share. Overall, the company has reported Non-GAAP net income of $636 million compared to $383 million a year ago and $501 million in the prior quarter.
Meanwhile, in October, the company had announced its plan to buy Xilinix in a deal worth $35 billion that is expected to close by the end of this year. Xilinix focuses on specialized chips that can efficiently handle tasks like compressing videos, as compared to AMD’s general-purpose processors. The acquisition is projected to give AMD more firepower to compete with Intel in the data center chip market. As per the company, the transaction was still on track to close by the end of the year.
AMD in the fourth quarter of FY 20 has reported the adjusted earnings per share of 52 cents, while reported the adjusted revenue growth of 53 percent to $3.24 billion in the fourth quarter of FY 20.. Non-GAAP operating income has increased to $663 million compared to $405 million a year ago and $525 million in the prior quarter.
For the current quarter, the company expects revenue to be in the range of $3.1 billion and $3.3 billion and said that it expects 2021 revenue would grow 37%.