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AMD shares plummet after the chip giant gives weak guidance

·Reporter
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Advanced Micro Devices (AMD) reported better-than-expected third quarter earnings, but the company released weak guidance.

“For the fourth quarter of 2018, AMD expects revenue to be appropriately $1.45 billion, plus or minus $50 million, an increase of approximately 8 percent year-over-year,” the company said in a statement.

That $1.45 billion compares to $1.6 billion expected by analysts.

AMD shares tanked more than 15% in early trade on Thursday.

The chipmaker’s Q3 earnings came in at 13 cents per share, which was just a penny above the 12 cents per share that was expected by analysts polled by Bloomberg. Revenue was roughly in line with analyst estimates at $1.7 billion.

“We delivered our fifth straight quarter of year-over-year revenue and net income growth driven largely by the accelerated adoption of Ryzen, EPYC and datacenter graphics product,” AMD President and CEO Lisa Su said.

The stock has soared nearly 130% this year, but has fallen 33% from its September highs as of market close.

Chip stocks are often looked to by investors as a proxy for the overall health of the global economy. The Philadelphia Semiconductor Index, of which AMD is a component, has gotten crushed over the past month – falling 12%. The group had its worst day since October 10, 2014 on Wednesday.

Heidi Chung is a reporter for Yahoo Finance. Follow her on Twitter: @heidi_chung.

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