AMD Warns on Revenue, Cuts Forecast

The PC industry continues its grueling decline

   

AMD1 AMD Warns on Revenue, Cuts ForecastIt’s been a brutal year for Advanced Micro Devices (NYSE:AMD). Its stock is down about 45% and, unfortunately, a recovery seems far away.

Last night, the company issued a warning for Q3. Revenue is expected to plunge 10% from last quarter to $1.27 billion. The prior forecast was a range of $1.36 billion to $1.44 billion.

Gross margins are also forecast to be about 31%, which is down from an earlier estimate of 44%. And there will be a $100 million charge for inventory.

AMD’s troubles should actually not be a surprise, though. Even large players like Intel (NASDAQ:INTC) are struggling in the PC market because of the continued shift to tablets — a shift that has benefited companies like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).

Plus, AMD has been lagging in terms of mobile strategy. And with much fewer resources than rivals like Intel and Qualcomm (NASDAQ:QCOM), there seems to be little hope that the company will be able find a way to get a meaningful piece of the tablet market.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.”  Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2012/10/amd-warns-on-revenue-cuts-forecast/.

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