Chipmaker AMD (NASDAQ: AMD) reported their Q4 2019 earnings today posting strong results narrowly beating analyst expectations.
Analyst estimates for the quarter were extremely bullish with consensus revenue estimates of $2.1 billion representing a 48% year-over-year growth and earnings per share estimates of $0.31 representing nearly a 300% increase compared to the same quarter last year.
AMD’s actual sales in the quarter were $2.13 billion representing strong growth of 50% year over year and narrowly beating those sky high expectations.
While sales in 2019 were strong, AMD also provided its outlook on 2020 sales. For Q1 2020, the company expects $1.8 billion in sales, which represents a 42% increase over Q1 2019 but may be disappointing to investors given the decrease compared to great sales in Q4 2019.
Sales in the computing and graphics segment came in at $1.662 billion, growth of 68% year over year. Enterprise, embedded, and semi-custom segment sales were reported as $465 million, growth of 7%.
AMD reported an overall operating margin of 16%, a significant improvement over the 2% reported in the same quarter last year. Margins were primarily driven from the computing and graphics segment that saw operating margins growing/diminishing to 22% from 12% in the same quarter last year.
AMD’s results were comparable to competitor Intel (NASDAQ: INTC) which also reported a very solid earnings late last week.
The entire semiconductor sector has been on a solid run since the beginning of last year. Helped in part from improving PC sales thanks to the end of life of Windows 7 machines as well as improving expenditures on server and cloud infrastructure, semiconductor stocks easily outperformed the market. But AMD was clearly head and shoulders above the rest of the group.
Source: YCharts
On the bottom line, AMD reported $0.32 earnings per share which just beat consensus estimates of $0.31 per share. The earnings beat represented a continuing trend in increasing earnings, a 77% improvement over Q3 and 300% increase compared to the same quarter last year.
AMD’s stock had an incredible run in 2019 gaining almost 150% through the year and has also added another 7.5% to its stock price this year so far. While the stock fell off of its all-time highs last week after Intel’s earnings report, it has been recovering some of those losses this week and traded 2.6% higher today prior to releasing earnings.
In after market trading AMD was trading 3% lower immediately after releasing earnings at the time of publishing.
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