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AMD stock increases after profits show data center sales more than

Advanced Micro Devices Inc. shares increased in the extended session Tuesday after the chip maker stated data-center income more than doubled to fuel record quarterly sales, and increased its income forecast for the year.

” We had impressive year-over-year revenue growth throughout all of our organizations and data center earnings more than doubled,” AMD AMD, -0.23% President Lisa Su stated in a declaration. “Our increased full-year guidance highlights the strong growth we anticipate throughout our business based upon increasing adoption of our high-performance computing items and broadening client relationships.”

Sales from business embedded and semi-custom chips– the unit that includes data-center and gaming-console income– almost quadrupled to $1.35 billion, compared with $348 million a year back. Experts surveyed by FactSet anticipated $1.3 billion. Su’s remarks about data-center profits were practical as AMD does not break out data-center sales from video gaming sales.

Last week, Intel Corp. INTC, -1.34% said the data-center market was in a “digestion phase,” contributing to a 20% drop in sales for information centers, yet experts indicated increased competition from AMD and ARM Holdings PLC

. AMD reported first-quarter earnings of $555 million, or 45 cents a share, compared with $162 million, or 14 cents a share, in the year-ago period. After adjusting for stock-based compensation and other aspects, the Santa Clara, Calif.-based company reported revenues of 52 cents a share, compared to 18 cents a share in the year-ago duration. Profits rose to $3.45 billion from $1.79 billion in the year-ago quarter.

Analysts surveyed by FactSet had actually forecast adjusted profits of 44 cents a share on income of $3.18 billion, and AMD predicted between $3.1 billion and $3.3 billion.

Executives likewise increased AMD’s assistance for the full year, to a sales boost of about 50% from previous guidance of an approximately 37% boost. AMD reported profits of $9.67 billion in 2015, recommending sales of about $14.65 billion this year; experts had actually been forecasting earnings of $13.46 billion, according to FactSet.

AMD shares gained more than 3% in after-hours trading, following a 0.2% decline in the regular session to close at $85.21.

AMD reported first-quarter sales of $2.1 billion for computing and graphics chips, up 46% from $1.44 billion in 2015, compared with expert expectations of $1.89 billion.

AMD’s strong profits come amid a continuing lack of microchips to sate demand from worldwide industries, and the business that make the silicon wafers chip develops use, work to clear waiting lists that cover numerous months.

Read: The semiconductor lack is here to stay, however it will affect chip business differently

More of how the chip sector is dealing with supply shortages will revealed this week with Qualcomm Inc. QCOM, -0.68% incomes on Wednesday and KLA Corp. KLAC, -1.58% revenues on Thursday.

AMD expects second-quarter profits of $3.5 billion to $3.7 billion, while analysts had actually been forecasting $3.23 billion, according to FactSet.

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