AMD ended Q4 2020 surpassing Wall Street’s already high expectations, driven in large part by a 176% increase in sales in the server and gaming console segment. AMD expects 37% sales growth in 2021, well above analyst estimates.
Advanced Micro Devices (AMD), which has gained 92.3% in the past 12 months, has declined since the close of trading on Tuesday despite posting better-than-expected 2020 financials.
AMD has benefited from a surge in sales of PCs and game consoles such as the Sony PS5 and Microsoft Xbox One (for which it supplies processors) during the holiday Q4 ending in December, as well as from the demand for GPUs from cryptocurrency miners and the ongoing growing demand for server chips.
With expectations of continued demand for PC and data center processors, as well as continued demand for game consoles, AMD has given high forecasts for the full year of 2021, while warning that sales may seasonally decline in the first quarter.
AMD Q4 & FY 2020 Revenue & Profits
Earnings per share for the fourth quarter rose 63% (yoy) to $ 0.52, up $ 0.05 from analysts’ estimates of $ 0.47.
Quarterly revenue grew by 52% and amounted to $ 3.24 billion, which is also higher than the analytical estimate of $ 3.02 billion. Statistics of quarterly revenues and earnings of AMD for the last 2 years are available here.
AMD’s Computers & Graphics business revenue rose 18% to $ 1.96 billion, driven by strong sales of Ryzen processors.
Revenue for the Enterprise, Embedded & Semi-Automated Processors division rose 176% to $ 1.28 billion year-over-year and 13% quarter-on-quarter, driven by higher sales of EPYC and Half-processor server chips. Custom for game consoles such as Sony PS5 and Microsoft Xbox One, which came out ahead of New Year sales in December.
AMD’s revenues for the whole 2020 grew 45% compared to 2019 to $ 9.76 billion, profit showed an increase of 108% to $ 2.49 billion.
“In 2020, we have significantly accelerated our business, delivering record annual revenue and more than doubling our bottom line compared to 2019,” said Dr. Lisa Su, President and CEO of AMD.
AMD forward-looking statements
AMD expects to generate $ 3.2 billion in revenue this quarter (plus or minus $ 100 million), up 79% from a year earlier and above the analyst average of $ 2.73 billion. At the same time, revenue current quarter will decrease by 1% compared to the 4th quarter due to seasonality factor.
AMD’s full-year 2021 sales forecast is 37% growth to $ 13.38 billion, which is also above analyst expectations of $ 12.24 billion.
In January, AMD unveiled a series of new Ryzen 5000 mobile processors that will begin shipping in Q1 2021.
AMD said it expects 50% growth in laptop and PC processor shipments this year.
AMD also plans to complete the acquisition of Xilinx by the end of the year, which will strengthen its data center chip business and compete against Intel.
“Our financial forecast for 2021 underlines the strength of our product portfolio and strong demand for high performance computing in the PC, gaming and data center markets,” AMD said.