AMD revenue drops 9% as PC chip sales decline sharply

AMD reported first-quarter results on Tuesday that showed revenue dropping 9% on an annual basis. While earnings and sales beat Wall Street expectations, AMD’s guidance for the current quarter was light and shares dropped over 3% in extended trading.

Here’s how the company did versus Refinitiv consensus estimates for the quarter ending in December:

• EPS: $0.60 per share, adjusted, versus $0.56 per share expected
• Revenue: $5.35 billion, versus $5.3 billion expected

AMD said it expected about $5.3 billion in sales in the current quarter, versus expectations of $5.48 billion. However, in a statement, AMD CEO Lisa Su signaled that the company sees “growth in the second half of the year as the PC and server markets strengthen.”

Net loss for the company was $139 million, or a loss of nine cents per share, versus net income of $786 million, or $0.56 per share, during the same quarter last year. AMD excludes certain losses on investments and acquisition-related costs from its earnings.

The biggest drop came in AMD’s client group, which includes sales from PC processors. AMD reported $739 million in sales in the category, a 65% decrease from $2.1 billion in sales during the same period last year.

AMD’s report comes as the PC industry is in a deep slump, with shipments dropping 30% in the first quarter, according to IDC.

AMD’s data center segment grew a tiny bit during the year, to $1.295 billion from $1.293 billion last year. AMD management also said that the category is likely to grow in the current quarter.

AMD’s gaming segment, which includes graphics processors for PCs as well as chips for consoles like Sony Playstation 5, reported $1.76 billion in sales, down slightly from last year’s $1.88 billion mark.

While the results showed a lack of growth, they came during a tough time for chipmakers. Last week, Intel, AMD’s primary competitor in the PC and server chip markets, reported that its overall sales dropped 36%.