AMD Blows Away Q4 Estimates On Broad-Based Strength, Issues Upbeat Guidance

Advanced Micro Devices, Inc. AMD announced Tuesday forecast-beating fiscal year 2020 fourth-quarter results, thanks to solid sales of Ryzen processors, gaming chips and EPYC server processors

 Suggesting ongoing momentum, the company guided to above-consensus first-quarter and fiscal-year 2021 revenues.

AMD's Key Q4 Numbers: AMD said its fourth-quarter revenues came in at $3.24 billion, topping the $3 billion mark for the first time ever. This represented a 53% year-over-year increase and 16% sequential growth.

Adjusted EPS came in at 52 cents compared to and 32 cents in the fourth quarter of 2019 and 41 cents in the third quarter.

Analysts, on average, estimated earnings per share of 47 cents on revenues of $3.02 billion for the quarter.

Non-GAAP gross margin remained flat year-over-year at 45%, although expanding 1 percentage point from the previous quarter. The company reported fiscal year 2020 non-GAAP EPS of $1.29 on revenues of $9.76 billion. Cash and cash equivalents at the end of the fourth quarter were at $2.29 billion.

Related Link: AMD Analyst Projects Strong Start To 2021 For Chipmaker

AMD's Segmental Performance: The Computing & Graphics segment, accounting for about 60.5% of revenues, saw revenue growth of 18% year-over-year to $1.96 billion. Strong Ryzen processor sales lifted the performance of the segment.

The Enterprise, Embedded, and SemiCustoms Segment, which made up the remaining 39.5% of the revenues, ringed in revenue growth of 176% to $1.28 billion. Strong semi-custom and EPYC processor sales lifted the performance of this segment.

Ahead of the results, Cascend Securities analyst Eric Ross said graphics card activity in the supply chain remains incredibly high, in part driven by crypto and Data center offerings, specifically EPYC, are gaining steam, with major data center buyers throning to the company.

AMD's Forward Outlook: The chipmaker guided to fiscal year 2021 first-quarter revenues of $3.2 billion, plus or minus $100 million, up about 79% year-over-year but down 1% from the fourth quarter of 2020. Non-GAAP gross margin is estimated at 46%.

The consensus estimates for the quarter call for EPS of 35 cents and revenues of $2.73 billion.

The company initiated fiscal-year 2021 guidance, expecting revenue growth of 37%, driven by growth in all businesses. This compares to the 28.2% growth the Street is forecasting. AMD expects a further expansion in non-GAAP gross margin to 47%.

AMD Stock: AMD shares closed Tuesday's session up about 1% at $94.71. Shares doubled in 2020 and have added a little over 3% in the year-to-date period.

The average analysts' 12-month price target for AMD is $98.15, according to TipRanks, suggesting roughly 4.3% upside from current levels.