AMD closes out Q4, 2019 strong, but Q1 outlook mixed
AMD reported a fourth-quarter revenue growth of 50% as its results topped expectations.
The company reported a net income of $170 million, or 15 cents a share, on revenue of $2.13 billion. Non-GAAP earnings were 32 cents a share.
Wall Street was looking for AMD to report fourth-quarter revenue of $2.11 billion with adjusted earnings of 31 cents a share.
AMD's fourth-quarter earnings come a few days after Intel delivered strong fourth-quarter earnings due to its data center unit. Cloud providers have been investing heavily in building out capacity and that has benefited Intel's server processors. AMD, which has its Epyc processor, doesn't have the data center share enjoyed by its much larger rival.
In the quarter, AMD said it saw strength in its computing and graphics unit, which saw sales growth of 18%. Revenue was lower for AMD's enterprise, embedded and semi-custom unit. Gross margins also improved to 45%, up from 38% a year ago. AMD ended the quarter with $1.5 billion in cash and cash equivalents.
As for the outlook, AMD projected revenue of about $1.8 billion, give or take $50 million. Wall Street was looking for non-GAAP earnings of 20 cents a share on revenue of $1.86 billion. Wall Street was looking for non-GAAP earnings of 20 cents a share on revenue of $1.86 billion. AMD added that it expects strong first-quarter sales for Ryzen, Epyc, and Radeon processors. For 2020, AMD is projecting sales growth of 28% to 30%.
For the year, AMD reported a net income of $341 million, or 30 cents a share, on revenue of $6.73 billion. Dr. Lisa Su, AMD president and CEO, said that 2019 was a key milestone as it gained market share with Ryzen and Epyc processors.
In prepared remarks, Su said:
Cloud adoption with the largest providers continues to accelerate, driven by the expanding use of Epyc processors to power their critical internal workloads as well as a significant increase in the number of AMD- powered instances publicly available. Shipments to cloud providers increased sequentially by a significant double-digit percentage to support expanding buildouts at Amazon, Google, Microsoft, Oracle and Tencent.
In the enterprise, Dell began shipping their full portfolio of servers powered by our latest Epyc processors. We have doubled the number of Epyc processor platforms in market to more than 100 offerings in the quarter. These new platforms are driving increased enterprise customer engagements, broadening our sales pipeline considerably.