What’s in Store for Advanced Micro (AMD) in Q3 Earnings?

Advanced Micro Devices Inc. AMD is set to report third-quarter 2017 results on Oct 24. Notably, the company has a positive record of earnings surprises in the trailing four quarters, with an average surprise of 35%.

In the last quarter, the company reported a loss of a penny per share, which was narrower than the Zacks Consensus Estimate of a loss of 2 cents per share. Revenues increased 19% year over year to $1.22 billion, primarily driven by growing demand for the Graphics Processor Units (GPU) and an expanding customer base. Revenues also beat the Zacks Consensus Estimate of $1.15 billion.           

AMD expects third-quarter 2017 revenues to increase 23% sequentially (+/- 3%). At the mid-point, this reflects 15% growth on a year-over-year basis. Further, gross margin is likely to be 34%, while non-GAAP operating expenses are estimated to be $400 million.

AMD stock has gained 23% year to date, underperforming the 28.4% rally of the industry it belongs to.

 

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

We note that AMD has introduced a host of new products during the quarter which is anticipated to boost the top-line positively going ahead. The company unveiled AMD4U comprising gaming applications and tools that are in compliance with AMD processors and graphics.

Notably, the lineup of Ryzen mainstream desktops was completed with AMD releasing Ryzen 3 1300X and Ryzen 3 1200 processors during the soon-to-be-reported quarter. The company also focused on certain advancements related to creation of professional content as evident from the company’s introduction of Radeon Pro WX 9100 and Radeon Pro SSG, a new range of professional graphics cards.

Advanced Micro Devices, Inc. Price and EPS Surprise

Advanced Micro Devices, Inc. Price and EPS Surprise | Advanced Micro Devices, Inc. Quote

The company also launched Radeon RX Vega, a gaming card aimed at enhancing experiences on PC gaming platforms. Additionally, arrival of…

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