Semiconductor company Advanced Micro Devices, Inc. (NASDAQ: AMD) Tuesday said its third-quarter revenues grew 56% as demand conditions continued to improve. Consequently, earnings increased and surpassed the consensus estimate. Separately, the company announced the acquisition of rival chipmaker Xilinx (XLNX).
In the September quarter, revenues surged 56% year-over-year to $2.8 billion, which is also above the market’s projection. Adjusted net income was $0.41 per share, compared to $0.18 per share in the third quarter of 2019. Analysts had predicted a slower bottom-line growth.
Net income, including special items, jumped to $390 million or $0.32 per share from $120 million or $0.11 per share in the year-ago quarter.
In a separate statement, the company said it signed an agreement to acquire Silicon Valley tech firm Xilinx, Inc. for $35 billion. The transaction, which is expected to close by the end of the calendar year 2021, will be immediately accretive to AMD’s margins, earnings, and free cash flow.
“Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high-performance computing leader and partner of choice for the largest and most important technology companies in the world. This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company,” said AMD’s CEO Dr. Lisa Su.
Soon after the report came out, AMD shares declined in Tuesday’s early trading hours, paring a part of the recent gains. The stock has gained 64% since the beginning of the year.
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