AMD Issues Quarter Earnings WarningBy Reuters | Posted 2010-09-28 Email Print
Computer processor maker AMD said that lower-than-expected revenues came from weaker-than-expected demand, particularly from consumers buying laptops in North America and Europe.
SEATTLE, Sept 23 (Reuters) - Chip maker Advanced Micro Devices Inc (NYSE:AMD) said on Thursday it expected third-quarter revenue to fall 1 to 4 percent from $1.65 billion in the second quarter, due to weaker-than-expected demand, especially among consumers buying laptops in Western Europe and North America.
The warning is the latest in a line of downbeat signals from tech companies concerned about the faltering recovery in computer-related spending.
A month ago, the world's No. 1 chip maker, Intel Corp (NASDAQ:INTC) warned that third-quarter revenue could fall short of its own estimates by more than $1 billion.
AMD's shares fell in choppy extended-hours trading, but then recovered to gain 2.2 percent from their $6.40 close on Nasdaq.
Investors had already anticipated lower numbers from AMD and the stock has fallen 22 percent since the end of July, while several analysts had already cut their earnings estimates.
AMD's new forecast indicates that it now expects revenue ofbetween $1.59 billion and $1.64 billion for its third quarter, ending Sept. 25. Wall Street analysts had on average expected sales to grow about 4 percent to $1.72 billion, according to Thomson Reuters I/B/E/S.
The warning underlines how the dramatic slowdown in tech spending growth has quickly shaken AMD's optimism about the recovery.
As recently as July, AMD Chief Financial Officer Thomas Seifert said the company expected third-quarter revenue to grow 5 percent to 10 percent from the second quarter. (Reporting by Bill Rigby; Editing by Richard Chang, Leslie Gevirtz and Carol Bishopric)