AMD posts mixed results and guides lower, but beaten down shares spike (AMD)

amd ceo lisa su

AMD posted mixed quarterly results.
The company's revenue guidance for the quarter missed Wall Street expectations.
Shares gained as much as 7% after the results.
Watch AMD trade live.

AMD on Tuesday announced mixed fourth-quarter results and guidance that fell short of Wall Street expectations, but beaten down shares were up 5.4% after the report.

Here are the key numbers compared to the Bloomberg consensus:

Adjusted earnings per share: $0.08 versus an expected $0.08.
Revenue: $1.42 billion versus an expected $1.44 billion.
First-quarter revenue guidance: $1.2 billion to $1.3 billion versus an expected $1.47 billion.

AMD also said it expects full-year 2019 revenue to grow by a high single-digit percentage, driven by Ryzen, EPYC, and Radeon datacenter GPU product sales as the company ramps up its 7-nanometer products throughout the year. The company also sees the non-GAAP gross margin to be greater than 41% for 2019.

"In 2018 we delivered our second straight year of significant revenue growth, market share gains, expanded gross margin and improved profitability based on our high-performance products," CEO Lisa Su said in a press release. "Importantly, we more than doubled our EPYC processor shipments sequentially and delivered record GPU datacenter revenue in the quarter."

She added: "Despite near-term graphics headwinds, 2019 is shaping up to be another exciting year driven by the launch of our broadest and most competitive product portfolio ever with our next-generation 7nm Ryzen, Radeon, and EPYC products."

Ahead of the results, shares had plunged 5% on Tuesday — one day after rival Nvidia warned that conditions in China had led to an "extraordinary, unusually turbulent" quarter. The chipmaker cut its revenue guidance for the fourth quarter to roughly $2.2 billion, down from about $2.7 billion.

And one Wall Street analyst thought the warning from Nvidia could indicate an earnings miss for AMD.

"While the other shoe has dropped at NVIDIA, we think AMD is further behind in working through its GPU inventory issues," Susquehanna International Group analyst Christoper Rolland wrote ahead of the report.

"For AMD, we note evidence of continuing retail price declines suggesting its graphics card channel has yet to clear. Additionally, we note Street expectations for Computing and Graphics in 1Q19 of +3% that are well above typical seasonality (we would not be surprised to see a mid-single digit decline or even worse here). With the additional negative commentary describing a deteriorating macro picture and Chinese gaming at NVIDIA, we continue to believe that AMD is at significant risk of a miss in 4Q18/1Q19."

AMD shares gained 45% over the past 12 months.