Shares of chip maker Advanced Micro Devices (AMD) are down 23 cents, or roughly 7%, at $2.97, in late trading after the company this afternoon said its revenue for Q3 ended last month will fall 10% from the prior quarter’s level.
With Q2 revenue of $1.43 billion, that would be roughly $1.29 billion.
Analysts have been modeling AMD’s revenue to fall to $1.38 billion.
Gross margin is expected by the company to come in at 31%, less than the 44% the company had previously projected, “due to an inventory write-down of approximately $100 million due to lower anticipated future demand for certain products” and “weaker than expected demand which contributed to lower than anticipated average selling prices (ASPs) for the company’s Computing Solutions Group products and lower than expected utilization of its back-end manufacturing facilities.”
AMD will report full results on October 18th.
That AMD, which competes with Intel (INTC) and Nvidia (NVDA) in the PC processor market, should warn seems of little surprise given worse-than-expected Q3 PC numbers last night, and given recent worries about Intel’s Q3 revenue.
The warning follows the departure of CFO Thomas Siefert on September 17th, and the company’s below-consensus outlook for the quarter back on July 19th.
AMD Cuts Q3 Revenue Outlook - Quick Facts
Semiconductor Company Advanced Micro Devices Inc. (AMD) Thursday said that it lowered its third-quarter revenue outlook, primarily due to weaker than expected demand across all product lines caused by the challenging macroeconomic environment.
The company now expects revenue for the third quarter ended September 29, 2012 to decrease approximately 10 percent sequentially. The company previously forecasted third quarter 2012 revenue to decrease 1 percent, plus or minus 3 percent, sequentially. Analysts polled by Thomson Reuters expect the company to report revenues of $1.38 billion for the third-quarter. Analysts' estimates typically exclude special items.
The company now expects third quarter gross margin to be approximately 31 percent; less than the previous expectation of approximately 44 percent primarily due to an inventory write-down of approximately $100 million due to lower anticipated future demand for certain products. Third quarter gross margin was also negatively impacted by weaker than expected demand, which contributed to lower than anticipated average selling prices (ASPs) for the company's Computing Solutions Group products and lower than expected utilization of its back-end manufacturing facilities.
Operating expenses for the third quarter are expected to decline approximately 7 percent sequentially as a result of tightly controlled expenses in the quarter.
The company said it will report third quarter 2012 results after market close on Thursday, October 18, 2012.
Sentiment: Strong Sell