AMD's earnings top estimates as graphics chip demand rises

TechnologyReuters

Chipmaker AMD (NASDAQ:AMD) on Tuesday reported fourth-quarter earnings and revenue that handily exceeded Wall Street forecasts, as it sold more graphics processors used in data centers and computers.

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Sunnyvale, California-based AMD said sales in its graphics and computing business, which makes processors for servers and gaming consoles, rose 60 percent year-over-year to $958 million in the quarter ended Dec. 30.

AMD said total revenue rose 33.3 percent to $1.48 billion. That exceeded analysts' average estimate of $1.41 billion, according to Thomson Reuters I/B/E/S.

The company reported net income of $61 million or 6 cents per share, compared to a loss of $51 million or 6 cents per share a year earlier.

Results also reflected an $18 million one-time tax credit related to new U.S. tax laws.

Excluding one-time items, AMD earned 8 cents per share, topping analysts' average estimate of 5 cents.

The company's shares, which were up slightly in after-hours trading recovered from an initial 6 percent selloff.

In a cautionary statement accompanying results, AMD said its efforts to fix a critical security flaw in its chips may be costly or even ineffective.

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Earlier this month, researchers disclosed flaws called Spectre and Meltdown that could let hackers steal sensitive information from nearly every modern computing device containing chips from AMD, Intel Corp (NASDAQ:INTC) or ARM Holdings (NASDAQ:ARMH).

AMD has said its chips were vulnerable to the Spectre bug, and that it would issue patches for certain processors.

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