AMD cuts view on weak demand, shares fall
SAN FRANCISCO (MarketWatch) -- Shares of
AMD's (AMD) stock was trading down nearly 6% in after-hours trading after announcing that it now expects an 11% sequential decline in sales. Previously, the company said it expected revenue to grow sequentially by 3%, plus or minus 3%.
The company blamed the lower revenue projection to "business conditions that materialized late in the second quarter, specifically softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the company's [manufacturing] business."
AMD issued the warning amid a more bearish view of the chip sector based on concerns about the crisis in Europe and overall demand. Read full story on outlook for semiconductor firms.
"The second-quarter miss isn't hugely surprising as poor PC data points have been pretty well telegraphed for nearly two months now," Evercore Partners analyst Patrick Wang said in e-mailed comments. "The PC market seems to be limping along."
But Wang also said, "However, the magnitude will definitely raise a few eyebrows."
Webush analyst Betsy Van Hees also said that "while disappointing, AMD's negative pre-announce doesn't come as a surprise given the very challenging macro environment and may be setting the stage for an even more muted third-quarter than we had previously expected."