AMD Lowers Q2 Forecast, Shares Tumble

by Christopher Freeburn | July 10, 2012 9:32 am

AMD Lowers Q2 Forecast, Shares Tumble

Fallout from the global economic slowdown will impact chip sales[1] at Advanced Micro Devices (NYSE:AMD[2]).

Citing lackluster sales in Europe and China, the company said it now expects second-quarter revenues to fall 11%, compared to the first quarter. It had previously said second-quarter revenues would dip by just 3%, CBS noted.

Investors did not like the guidance and AMD shares dropped more than 8% in pre-market trading on Tuesday.

The diminished outlook surprised analysts who had expected the company to report earnings up about 3% to $1.69 billion for the quarter.

The chip-maker will issue its second-quarter numbers on July 19.

AMD’s warning prompted analysts to cut their price targets for the stock. A Citigroup (NYSE:C[3]) analyst trimmed his estimate for AMD shares from $10.50 to $8, but expected the company’s picture to brighten later in the year.

The company is facing increased pressure not only from the global slowdown but from chip-making competitor Intel (NASDAQ:INTC[4]), which recently introduced its new line of Ivy Bridge processors.

Endnotes:
  1. will impact chip sales: http://www.cbsnews.com/8301-505245_162-57469200/ahead-of-the-bell-advanced-micro-devices/
  2. AMD: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMD
  3. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  4. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC

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