Advanced Micro Devices Inc. blew past analysts’ estimates for earnings and revenue today thanks to strong sales in both of its main business segments.

The strong quarterly results were followed by a bullish forecast for the next three-month period and full year, sending AMD’s stock up more than 10% in extended trading.

AMD reported operating income in the fourth quarter of $1.2 billion, up an astonishing 112% from a year ago thanks to what officials said was higher revenue and gross margin expansion. Earnings before certain costs such as stock compensation came to 92 cents per share, while revenue rose 49% from a year ago, to $4.83 billion.

That was better than expected, with Wall Street looking for earnings of just 76 cents per share on revenue of $4.53 billion.

AMD said its net income for the quarter fell to $974 million, however, because of a $1.3 billion income tax benefit associated with a valuation allowance release that occurred in the last quarter of its previous financial year.

For its full fiscal 2021 year, AMD reported revenue jumped 68% from 2020, to $16.4 billion. Operating income for 2021 leaped 166%, to $3.65 billion, while net income rose 27%, to $3.16 billion.

AMD President and Chief Executive Lisa Su (pictured) said it was an “outstanding year” for the company, with record revenue and profitability.

“Each of our businesses performed extremely well, with data center revenue doubling year-over-year driven by growing adoption of AMD EPYC processors across cloud and enterprise customers,” Su said. “We expect another year of significant growth in 2022 as we ramp our current portfolio and launch our next generation of PC, gaming and data center products.”

Indeed, AMD promptly issued some very bullish guidance for the first quarter, saying it expects sales in a range of $4.9 billion to $5.1 billion, representing a 45% jump from a year ago. Wall Street had earlier forecast first-quarter revenue of just $4.32 billion.

For fiscal 2022, AMD is forecasting $21.5 billion in total sales, above the forecast of $19.26 billion. That would amount to a 31% jump from the year just gone.

AMD’s confidence stems from the ongoing surge in personal computer and electronics sales that began with the COVID-19 pandemic outbreak almost two years ago. It has recently launched new computer chips that promise significant performance gains, allowing it to seriously challenge Intel Corp. in the PC segment.

AMD’s computing and graphics segment, which reflects those sales, pulled in fourth quarter revenue of $2.6 billion, up 32% from the year before. AMD said the growth was driven by high demand for its new Ryzen processors and Radeon graphics chips.

The most impressive growth however was to be found in AMD’s embedded, enterprise and semicustom segment, which includes computer server and games console chip sales. There, revenue jumped by 75%, to $2.2 billion, helped in part by increased sales to cloud computing giants such as Amazon Web Services Inc.

“We expect [semicustom] revenue to grow this year driven by continued strong demand for the latest Microsoft and Sony consoles,” Su told analysts on a call, adding that the current console upgrade cycle is outpacing all prior generations.

Holger Mueller of Constellation Research Inc. told SiliconANGLE that AMD did extraordinarily well in fiscal 2021, even by the high standards of the overall semiconductor market, with its revenue growth of almost 70% outdoing many of its rivals.

“The driver was AMD’s server business and there, the new EPYC processor platform that shows no signs of slowing down in 2022,” Mueller said. “We predicted EPYC would be an epic asset for AMD and so far it has fully delivered.”

Mueller said AMD’s management under Su also did a great job of containing costs while maintaining its healthy profit margin. “That will be of even more importance in 2022, especially if any of AMD’s platforms experience a hiccup,” he added.

“AMD crushed this quarter, setting records on revenue and earnings per share,” said another analyst, Patrick Moorhead of Moor Insights & Strategy. “More impressively, it raised its first-quarter and full-year forecast. Lisa Su and the company are firing on all cylinders.”

AMD has been working to close its $35 billion acquisition of Xilinx Inc., with the deal expected to give the company more firepower to take on Intel in the data center chip market. On Jan. 27, AMD announced it had been given approval from Chinese regulators for the deal to go ahead.

“The only remaining regulatory review required is FTC approval of our HSR re-filing and we expect to close the transaction in the first quarter of 2022,” Su said in response to a question today.

Su also told analysts the company has enough chip production capacity to meet its sales forecasts in 2022. She explained that the company spent more than $1 billion in 2021 to secure long-term production capacity. Su also told analysts she expects the chip shortage will become “less severe” as the year progresses.

Photo: AMD