AMD Announces 2022Q3 Earnings Report: Data center products continue to sell well
AMD announced its third-quarter 2022 results, with revenue of $5.565 billion, up 29% year-over-year and a decrease of $985 million from the previous quarter. Since AMD issued a warning for the third quarter of 2022 earnings in early October, due to the severe global macroeconomic situation and the sharp decline in PC market demand, revenue has experienced a significant decline, so the final figures of this financial report are not surprising.
In the quarter, AMD’s gross margin was 42%, compared to 48% in the same period last year, and even 54% in the previous quarter. Net profit was $66 million, a 93% drop from $923 million in the same period last year, and earnings per diluted share were $0.04, a 95% drop from $0.75 in the same period last year. AMD highlighted lower profitability due to the amortization of intangible assets from the acquisition of Xilinx and higher R&D spending, partially offset by a $135 million tax benefit in the quarter.
The revenue of the data center division was $1.609 billion, an increase of 45% year-on-year, and the operating profit was $505 million, which was also higher than the operating profit of $308 million in the same period last year; customer segment, with revenue of $1.022 billion, less than half of the previous quarter ($2.152 billion) and a decrease of 40% year-over-year, with an operating loss of $26 million compared to an operating profit of $490 million in the same period last year;
the revenue of the game division was $1.631 billion, a year-on-year increase of 14%, and the operating profit was $142 million, compared with $231 million in the same period last year; embedded business unit revenue was $1.303 billion, an increase of 1549% year-on-year, and operating profit was $635 million, compared with $23 million in the same period last year.
The data center segment is key to AMD’s continued success, and the third quarter of 2022 will be no exception. AMD said in the third quarter, supply is still limited, although the new generation of EPYC processors code-named Genoa has begun to ship, but only limited to selected customers, and the number is not large. By the fourth quarter of 2022, AMD could be grabbing additional market share from Intel if supply can keep up.
AMD expects revenue in the fourth quarter of 2022 to be about $5.5 billion, plus or minus $300 million, an increase of about 14% year-on-year, roughly flat quarter-on-quarter, and a gross profit margin of around 51%. In addition, AMD expects full-year 2022 revenue to be approximately $23.5 billion, plus or minus $300 million, an increase of approximately 43% compared to 2021, with data center and embedded products being the main drivers. The outlook for both the fourth quarter and the full year of 2022 is below analysts’ expectations.
