AMD saw revenue jump 40% in the first quarter over a year earlier, reaching $1.79 billion, primarily on the strength of computing and graphics sales. The result, announced Tuesday after markets closed, was at the lower end of earlier guidance.
The company was also one of the few semiconductor makers to provide a forecast for revenues for all of 2020, predicting full year revenues to grow by 25%, plus or minus 5 percentage points. AMD also expects second quarter revenue growth of 21% year over year due to Ryzen and Epyc processor sales.
AMD’s outlook for 2020 stands in stark contrast to the views of most semi executives in a recent survey who said they expect 2020 overall industry revenues to be in decline, some by more than 10%.
Net income in the second quarter was $162 million, up $146 million from first quarter 2019. AMD’s stock dropped 1.7% on the Nasdaq at market close on Tuesday, reaching $55.51. After hours declines were nearly 5%.
CEO Lisa Su said the company executed well in the first quarter despite the challenging environment created by COVID-19. On a conference call with analysts, she said the breadth of the impact of COVID-19 has been “staggering.” AMD has partly responded by having the vast majority of its 12,000 employees work from home, she added.
“While we expect some uncertainty in the near-term demand environment, our financial foundation is solid and our strong product portfolio positions us well across a diverse set of resilient end markets,” she said in a statement.
On the call, she added that the strong full-year guidance is due to AMD's progress in the data center and with gaming consoles. However, she said there might be weakness in the PC market in the second half even with an increase of PC use with work from home trends. And, she said AMD has its strongest notebook chips ever giving the company an opportunity to gain share even with a weaker market.
The computing and graphics business segment at AMD saw $1.44 billion in revenues, up 73% year over year. Ryzen processor and Radeon product channel sales helped. The average client selling price for Ryzen processors increased. AMD saw a 21% year over year decline in revenues from enterprise, embedded and semi-custom sales.
During the first quarter, AMD announced deals with Google Cloud, Microsoft and IBM Cloud related to virual machines and virtual workloads. The first notebooks based on AMD Ryzen 4000 mobile processors from Acer and ASUS launched, while new platforms will launch in coming quarters from Dell, HP, Lenovo and others, AMD said.