Fallout from the global economic slowdown will impact chip sales at Advanced Micro Devices (NYSE:AMD).
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) 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), which recently introduced its new line of Ivy Bridge processors.