Advanced Micro Devices Inc. (AMD, Financial) resoundingly beat forecasts by reporting huge fourth-quarter and full-year earnings and revenue gains, fueled largely by rising demand for its server and PC processors.
The Santa Clara, California-based company announced on Tuesday that revenue for the fourth quarter of 2021 was $4.8 billion. Operating income was $1.2 billion, net income came in at $974 million and diluted earnings per share were $0.80. On a non-GAAP basis, operating income was $1.3 billion, net income was $1.1 billion and diluted earnings per share were $0.92.
For full-year 2021, the chipmaker’s revenue of $16.4 billion was up 68% compared to 2020, driven by higher revenue in the Computing and Graphics and Enterprise, Embedded and Semi-Custom segments, the company noted. The gross margin was 48%, an increase of more than three percentage points over 2020. Operating income was $3.6 billion compared to $1.4 billion in the prior year.
AMD shares closed at $116.78 on Tuesday, a gain of 2.21%, or $2.53 per share. After hours, it was trading at $129.00, a gain of $12.22, or 10.46%, though it pulled back slightly before the markets opened the following day.
“2021 was an outstanding year for AMD with record annual revenue and profitability,” said the company's President and CEO, Dr. Lisa Su. “Each of our businesses performed extremely well, with data center revenue doubling year-over-year driven by growing adoption of AMD EPYC processors across cloud and enterprise customers. We expect another year of significant growth in 2022 as we ramp our current portfolio and launch our next generation of PC, gaming and data center products.”
For the first quarter of 2022, AMD said it expects revenue to be approximately $5.0 billion, plus or minus $100 million, an increase of approximately 45% year-over-year and approximately 4% quarter-over-quarter.
The year-over-year increase is expected to be driven by growth across all businesses. The quarter-over-quarter increase is expected to be driven by higher server and client processor revenue. AMD expects the non-GAAP gross margin to be approximately 50.5% in the first quarter of 2022.
For the full year of 2022, AMD said it expects revenue to be approximately $21.5 billion, an increase of 31% over 2021, driven by growth across all businesses. AMD expects the non-GAAP gross margin to be approximately 51% for 2022.
During a conference call with Wall Street analysts, Su said that her team is projecting data-center sales to lead the firm’s growth in 2022. “We have also made significant investments to secure the capacity needed to support our growth in 2022 and beyond. Looking out over the long term, we’re confident in our ability to continue growing significantly faster than the market.”
“On the call, Su also told analysts that the only remaining hurdle to the company’s $35 billion deal to acquire Xilinx Inc. (XLNX, Financial)… is U.S. Federal Trade Commission approval of the company’s refiled antitrust paperwork, and reiterated the target of a first-quarter close,” reported MarketWatch. “Recently, AMD received conditional regulatory approval for the acquisition from Chinese regulators.”
China's State Administration for Market Regulation “gave the go-ahead late last week, paving the way for the two companies to merge, which the two semiconductor designers said should be complete by the end of March 2022,” the Motley Fool reported. “China's regulatory division basically stipulated AMD could proceed on the condition that AMD and Xilinx chips will continue to be made available to China as they have been in the past. In other words, AMD can't require that a Xilinx hardware purchase be bundled with AMD hardware or vice versa.”
