After posting a sharp decline post-results, in the very next trading session Advanced Micro Devices, Inc. (NASDAQ:AMD) has managed to make an impressive comeback. In the reported quarter, the revenues surged 27% QoQ and 22% YoY. However, the guidance released for the next quarter resulted in an initial decline.
Advanced Micro expects next quarter revenue to decline 18% to come at nearly $1.072 billion. The market was expecting the guidance to come well below $1.060 billion for the next quarter. So even if the market calls it a guidance disappointment, it is not the actual case. Probably, instead of a decline, the market was anticipating a positive guidance surprise, and that not available, investors thought it wise to book the profits and close the trades.
The management view
Dr. Lisa Su, the CEO and President of Advanced Micro, said that 3Q2016 financial report indicates the progress that the company is making across business. The company now anticipates to deliver increased annual revenue for FY2016 based on robust demand for Polaris GPUs and AMD semi-custom solutions. This positions company well to accelerate growth in FY2017 as the company launched new high-performance graphics and computing products. Here, the important thing to note is that the CEO expects FY2016 revenue to come higher only for GPUs and semi-custom solutions.
The other higher accomplishing stuff like Zen, graphic cards, server chips and Summit Ridge, will be approaching along in 2017. Simply, not only did the company performed remarkable in the last few quarters, but also is playing ball with other hand behind its back. Most of what analysts are anticipating to lift profitability and revenue will be coming along next year.
The current scenario
Advanced Micro stock has been trading week for years as the market considered it to go out of operations any time. However, as it is noted, that probability has been absent for several quarters now. The company has cash of $1.3 billion, which indicates it is not danger of moving out of the market. From here on, in order for the company to move to the next level, it has to post consistent profitability and growth.