AMD reported better-than-expected revenue and earnings for the first quarter of the year. However, the company’s stock declined by 6% in after-hours trading on Tuesday due to the chipmaker’s guidance for the current period, which fell short of analysts’ estimates.

For the quarter ended in December, AMD’s adjusted EPS was 60 cents per share, surpassing the expected 56 cents per share. Additionally, the company’s revenue was $5.35 billion, exceeding the expected $5.3 billion.

AMD forecasted approximately $5.3 billion in sales for the current quarter, lower than the estimated $5.48 billion by Wall Street. Despite this, CEO Lisa Su noted that the company expects growth in the second half of the year as the PC and server markets strengthen.

AMD experienced a net loss of $139 million, or 9 cents per share, compared to a net income of $786 million, or 56 cents per share, during the year-earlier period. However, the company excludes certain losses on investments and acquisition-related costs from its earnings. Furthermore, its revenue decreased by 9% from $5.89 billion a year earlier.

AMD’s client group, which includes sales from PC processors, reported $739 million in sales, a 65% decline from $2.1 billion in sales during the same period last year. This decline occurred as the PC industry suffered a deep slump, with shipments dropping 30% in the first quarter, according to IDC. On the other hand, AMD’s data center segment sales increased slightly to $1.295 billion from $1.293 billion during the year-earlier period, and the company expects growth in this category in the current quarter.

AMD’s embedded segment of less powerful chips for networking saw sales soar to $1.56 billion from $595 million year over year, partially due to additional revenue from the company’s purchase of Xilinx. In contrast, its gaming segment, which includes graphics processors for PCs and chips for consoles like Sony PlayStation 5, reported $1.76 billion in sales, slightly down from $1.88 billion last year.

Overall, AMD’s report reflected the challenges faced by the PC industry and its competitors. Nonetheless, the company remains optimistic about growth in the second half of the year as it anticipates a strengthening of the PC and server markets.

Buying a PC: Factors to Consider for Your Respective Purpose