AMD Warns on Revenue, Cuts Forecast

by Tom Taulli | October 12, 2012 10:21 am

AMD Warns on Revenue, Cuts Forecast

AMD1 AMD Warns on Revenue, Cuts Forecast[1]It’s been a brutal year for Advanced Micro Devices (NYSE:AMD[2]). Its stock is down about 45% and, unfortunately, a recovery seems far away.

Last night, the company issued a warning[3] 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[4]) are struggling in the PC market because of the continued shift to tablets — a shift that has benefited companies like Apple (NASDAQ:AAPL[5]) and Amazon (NASDAQ:AMZN[6]).

Plus, AMD has been lagging in terms of mobile strategy. And with much fewer resources than rivals like Intel and Qualcomm (NASDAQ:QCOM[7]), 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[8], 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.[9]”  Follow him on Twitter at @ttaulli[10]. As of this writing, he did not hold a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/01/AMD1.jpg
  2. AMD: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMD
  3. issued a warning: http://www.reuters.com/article/2012/10/11/us-advancedmicrodevices-results-idUSBRE89A1K320121011
  4. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC
  5. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  6. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  7. QCOM: http://studio-5.financialcontent.com/investplace/quote?Symbol=QCOM
  8. IPOPlaybook: http://investorplace.com/ipo-playbook/
  9. How to Create the Next Facebook.: http://www.amazon.com/gp/product/1430246472/ref=s9_simh_gw_p14_d0_i1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-3&pf_rd_r=0GRB6ZMCTYDZVNG7Q7NV&pf_rd_t=101&pf_rd_p=470938811&pf_rd_i=507846
  10. @ttaulli: https://twitter.com/ttaulli

Source URL: http://investorplace.com/2012/10/amd-warns-on-revenue-cuts-forecast/
Short URL: http://invstplc.com/1nSmFtU