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AMD reports record data centre revenue, shares jump

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AMD reports record data centre revenue, shares jump
FILE PHOTO: Lisa Su, president and CEO of AMD, gives a keynote address during the 2019 CES in Las Vegas, Nevada, U.S., January 9, 2019. REUTERS/Steve Marcus   -   Copyright  STEVE MARCUS(Reuters)
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(Reuters) – Advanced Micro Devices Inc on Tuesday reported record growth in data centre revenue and forecast revenue growth in fiscal 2019 above expectations, sending shares up nearly 7 percent after the bell.

The chipmaker said it expects high-single digit percentage revenue growth in 2019, while analysts were targeting growth of about 6 percent.

AMD’s results come as a relief to investors fearing worse performance amid warnings from a host of other chipmakers about a slowdown in China triggered by the ongoing trade dispute with the United States.

Bigger rivals Nvidia Corp and Intel Corp both flagged a stagnating growth in data centre sales, a segment where AMD is beginning to get a foothold on the back of its server chips.

Gross margin rose to 38 percent from 34 percent a year earlier after the company started shipping newer versions of its graphics and data centre chips. The company also said it expects adjusted gross margins to be more than 41 percent for 2019.

Sales at AMD’s computing and graphics segment, which includes GPU sales to data centres, rose over 8.5 percent to $986 million (£751 million), beating the analyst average estimate of $939 million, according to FactSet.

Excluding items, AMD earned a profit of 8 cents per share, in line with the analysts’ estimates, according to IBES data from Refinitiv.

(Reporting by Shariq Khan and Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur)

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