Shulou(Shulou.com)11/24 Report--

CTOnews.com, November 2 (Xinhua)-- AMD released its earnings report for the third quarter of 2022 at the close of trading on Tuesday, local time.

The results came after AMD released a preliminary forecast in early October that saw revenue grow at an annual rate of 29 per cent to $5.6 billion at a time when the PC market was facing low inflation. More importantly, AMD's non-generally accepted accounting standards (non-GAAP) results and cash flow showed solid growth, indicating that the company was on a solid footing, although the acquisition of Xilinx resulted in operating losses on generally accepted accounting principles (GAAP) results.

According to its earnings report, AMD made a third-quarter profit of $66 million on revenue of about $5.6 billion, while taking into account the cost of acquiring Xilinx, the company posted a net operating loss of $64 million for the quarter. By comparison, the company made a profit of $923 million on revenue of $4.3 billion in the third quarter of last year.

For non-GAAP results, AMD's revenue grew by about 20% a year to $1.2 billion. Of course, the company's operating income measures the money left to it after taking into account product costs and other expenses (such as wages) and deducting it from income or net sales.

In terms of net income, AMD had only $1.1 billion in non-GAAP revenue and $66 million in GAAP revenue, up 23 per cent and 93 per cent year-on-year. AMD's GAAP and non-GAAP earnings are currently 4 cents and 67 cents per share, respectively.

In the critical quarter of the downturn in the industry, the key point of AMD's latest earnings report is the company's operations and free cash flow. AMD received a total of $965 million in operating cash flow and $842 million in free cash flow in the quarter, up 15 per cent and 10 per cent respectively from $849 million and $764 million in the same period last year.

AMD said it failed to meet its target for the quarter because of "a weak PC market and a sharp reduction in inventory in the PC supply chain". An important factor in the decline in profits was accounting after the acquisition of chip company Xilinx for about $50 billion in February.

Excluding the cost of acquiring Xilinx, AMD still posted an increase in gross profit margin (reflecting product costs as a percentage of total revenue) in the quarter, mainly because more expensive data centers and corporate products helped them achieve more revenue sales. Non-GAAP operating margins are 50 per cent, in line with AMD's own goals.

In addition, the company did grow in some areas, and while the market for game graphics cards is no longer as hot as it was during the mining boom, AMD said its gaming sector (revenue) grew 14%, or $1.6 billion, thanks to "higher sales of semi-custom products." This may refer to customized chips for hosts such as PlayStation 5, Xbox Series S and X, and Steam Deck.

In other respects, the performance of AMD's data center division also achieved a 45 per cent year-on-year growth. After all, sales of AMD EPYC chips are still very good, while the embedded business has also been greatly improved by the acquisition of Xilinx.

AMD will release a new generation of processors on November 10 and its latest GPU architecture on the 3rd. Lisa Su, chief executive of AMD, said on the company's earnings call that the company is also betting that many more people will be willing to buy mainframes as the winter vacation approaches.

Looking ahead, AMD expects fourth-quarter revenue of $5.5 billion and full-year revenue of $23.5 billion in 2022. By contrast, the company generated $4.8 billion in revenue in the fourth quarter of 2021 and $16 billion in full-year revenue, which means it will grow at an annual rate of 68 per cent.

As of CTOnews.com, AMD shares were up about 4.02% at $62.06 after hours.

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