The company said on Monday it expects revenue to have decreased about 8 percent from the first quarter, compared with its previous forecast of down 3 percent, plus or minus 3 percent.
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Access Investor Kit for Advanced Micro Devices, Inc. This press release contains forward-looking statements concerning AMD, its second quarter 2015 revenue, channel sales, gross margin, non-GAAP gross margin and its cash and cash equivalent balances, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Following the announcement, AMD shares plunged 14 percent in after-hours trade on the Nasdaq.
Any time investors see weak PC demand, the first consideration is whether or not it will also hurt Intel Corp. It turns out that AMD may just be suffering as a result of Intel rather than AMD indicating true weakness in Intel also. AMD, which uses partners to make its chips, disclosed that it had begun several designs for new products that would exploit an existing production process. Analysts were expecting $999.6 million, as stated by Thomson Reuters I/B/E/S.
Also, AMD said it expects GAAP gross margin to be further impacted by a one-time charge of about $33 million associated with a technology node transition from 20 nanometer (nm) to FinFET.
AMD’s fiscal second quarter ended on June 27.
It should surprise no one to learn that AMD blames its poor results, at least in part, on “weaker than expected consumer PC demand” – although why it should have expected anything other than weak demand is a bit of a puzzler, because that’s been the story of the PC market for the last couple of years, at least. The stock is down 7.5 percent in 2015. These earnings leave a lot to be desired for this company and the direction it is heading. If the firm’s second-quarter revenue is closer to $948m, it will be a 34.2 per cent dip from the same period a year ago.
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Update: The stock has resumed trading and is down 23 cents, over 9%, at $2.24. AMD seems to have become the poster child of the shirts that say “The beatings will continue until morale improves”.
