AMD Lowers Earnings Expectations for the Third Quarter

AMD's Sales in Q3 2012 Dropped by 10% Sequentially

by Anton Shilov
10/11/2012 | 06:51 PM

Advanced Micro Devices on Thursday slashed its revenue expectations for the quarter that ended on September 29, 2012. The company blamed problematic macroeconomic environment for drop in demand for its products.

 

AMD said that revenue for the third quarter of fiscal 2012 is expected to decrease approximately 10% sequentially, which is around $1.270 billion. The company previously forecasted third quarter 2012 revenue to decrease 1%, plus or minus 3%, sequentially. The lower than anticipated preliminary revenue results are primarily due to weaker than expected demand across all product lines caused by the challenging macroeconomic environment.

The company now expects third quarter gross margin to be approximately 31%; less than the previous expectation of approximately 44% 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% sequentially as a result of tightly controlled expenses in the quarter.

AMD will report third quarter 2012 results after market close on Thursday, October 18, 2012.