AMD beats Wall Street on revenue; shares rise

Advanced Micro Devices beat Wall Street's revenue and earnings projections Tuesday in its quarterly earnings report.

AMD, which is headquartered in California but has a large presence in Austin, is known for gaming-focused processors. Most of AMD's senior management team is based in Austin and the company employs about 1,500 people in Central Texas.

The chipmaker reported first-quarter revenue of $1.27 billion, down 23 percent year-over-year but exceeding Wall Street expectations. The company attributed the decline to lower revenue in its computing and graphics segment.

The company reported earnings per share of 1 cent. Earnings adjusted for one-time gains and costs were 6 cents per share, which beat Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 6 cents per share.

AMD reported operating income of $38 million and net income of $16 million.

AMD's computing and graphics segment fell 26 percent year-over-year to $831 million because of lower graphics channel sales. However, the decline was offset by client processor and data center GPU sales, AMD president and CEO Lisa Su said.

"We delivered solid first quarter results with significant gross margin expansion as Ryzen and EPYC processor and data center GPU revenue more than doubled year-over-year," Su said in a written statement. “We look forward to the upcoming launches of our next-generation 7nm PC, gaming and data center products which we expect to drive further market share gains and financial growth."

For the second quarter of 2019, AMD now projects revenue of $1.52 billion, a 13 percent decline year-over-year. AMD said it expects the decrease to be driven by lower graphics channel sales, blockchain-related GPU revenue and lower semi-custom revenue.

The semiconductor industry has faced a wave of uncertainty due to a slowdown in China's economy and President Donal Trump's ongoing trade conflict with China. Last week, AMD rival Intel Corp. saw its stock fall more than 6 percent after the company cut its revenue and earnings forecast for next quarter.

Despite that, AMD has seen a positive 2019, with its share price increasing by more than 45 percent this year.

In April, AMD released its latest wave of mobile processors, a move that analysts said could give the company a chance to gain a competitive edge over the industry's leading players.

READ MORE: Latest wave of processors should keep AMD riding high

The quarterly report comes one day before AMD turns 50 years old, which the company will commemorate with a gold edition of its Ryzen 7 2700X processor and Radeon VII graphics card.

AMD's share price rose about 6 percent in after-hours trading Tuesday.