Advanced Micro Devices, Inc. (NASDAQ:AMD) shares fell in afterhours trading as the chipmaker guided weaker-than-expected sales for the fourth quarter.
AMD said it expects 4Q sales of about $6.1 billion, plus or minus $300 million, compared to the Street expectation of $6.4 billion.
The company said at the midpoint of the revenue range, this represented year-over-year growth of about 9%.
Its 3Q earnings, however, topped Street estimates. Earnings per share of $0.70 came in ahead of expectations of $0.68.
Revenue of $5.8 billion also topped estimates of $5.71 billion, according to Zacks Investment Research.
Data Center segment revenue was flat year-over-year at $1.6 billion and Client segment revenue grew 42% to $1.5 billion driven by an increase in AMD Ryzen 7000 Series computer processing unit (CPU) sales.
Its gaming segment revenue fell 8% over the same period in 2022 to $1.5 billion attributed to a decline in semi-custom revenue partially offset by an increase in AMD Radeon graphics processing unit (GPU) sales, while Embedded segment revenue fell 5% to $1.2 billion on decreased revenue in the communications market.
“In the fourth quarter, we expect to see strong growth in Data Center and continued momentum in Client, partially offset by lower sales in the Gaming segment and additional softening of demand in the Embedded markets,” AMD CFO Jean Hu said in a statement.
The company’s 3Q earnings beat was not enough to offset its weak sales guidance in investors’ eyes, with AMD shares falling 4.8% to about US$94 shortly following the release of its earnings report.
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on X, formerly known as Twitter, @emilyjjarvie