Computer chipmakers Advanced Micro Devices Inc. and Xilinx Inc. saw their shares tumble Tuesday after they both posted lower-than-expected revenue guidance for their next quarters.

The stock drop came even though both companies posted what were reasonably solid results for the quarter just gone. In the case of AMD, it reported a profit before certain costs such as stock compensation of 32 cents per share on revenue of $2.13 billion. Wall Street had the company down for a 31-cent profit on revenue of $2.11 billion.

AMD said the highlight of the quarter was its computing and graphics unit, which makes chips and graphics cards for personal computers. It pulled in revenue of $1.66 billion, up almost 69% year over year. AMD’s enterprise, embedded and semicustom unit contributed an additional $465 million in revenue, up 7% from a year ago.

“2019 marked a significant milestone in our multiyear journey as we successfully launched and ramped up the strongest product portfolio in our 50-year history,” AMD Chief Executive Lisa Su (pictured) said in a statement. “We delivered significant margin expansion and increased profitability as we gained market share with our Ryzen and EPYC processors. Our focused execution and the investments we made in our high-performance computing roadmaps position us well for continued growth in 2020 and beyond.”

Moor Insights & Strategy analyst Patrick Moorhead told SiliconANGLE that he thought AMD had a very solid fourth quarter, with record revenue for 2019.

“Highlights for Q4 included an incredible 50% revenue growth driven mostly by Ryzen desktop and laptop and Radeon discrete graphics, which was up 69%,” Moorhead noted. “The company said it had strong EPYC sales, which I believe grew in triple digits. Game consoles was down a lot, which is natural given Microsoft and Sony’s schedules for the next-generation consoles. AMD guided to 42% quarterly growth, well above market growth, which is in the low single digits.”

Unfortunately for AMD, whatever optimism its numbers may have generated quickly evaporated with its guidance for the upcoming quarter. Executives said the company is projecting first-quarter revenue of about $1.8 billion, versus Wall Street’s forecast of $1.86 billion. As a result, AMD’s stock promptly fell by 4% in after-hours trading.

But Xilinx fared even worse. The company reported a profit of 68 cents per share on revenue of $723 million, down 13% from a year ago. Analysts were expecting it to post earnings of 59 cents per share on higher revenue of $730.6 million.

Xilinx blamed the shortfall on its wired and wireless business, which saw revenue fall by 29% in the quarter. Datacenter revenue also fell, by 16%. The weakness prompted the company to announce plans to lay off as much as 7% of its workforce and “reduce discretionary spending,” with an aim to create up to $20 million in operating-expense savings.

Not surprisingly, investors were aghast, and Xilinx’s stock promptly fell more than 8% in the after-hours trading session.

“Given the revenue headwinds we experienced during the quarter, we took actions to reduce our operating expenses which delivered earnings greater than our expectations,” said Xilinx Chief Executive Victor Peng. “These are difficult actions, but we believe the decisive steps we are taking to reset our operating expenses will allow us to drive our growth strategy and technology roadmap while enabling a more appropriate level of operating profitability.”

Photo: AMD Global/Flickr