NEW YORK (TheStreet) -- The chips were down in Wednesday's after-hours session after Advanced Micro Devices (AMD) made a deep cut to its revenue growth forecast, mainly because of manufacturing issues at a plant in Germany.
AMD, which said supplies of its Llano chip was impacted by the problems, said it now sees sequential revenue growth of 4-6% for its fiscal third quarter ending this month vs. a prior projection for growth of 10%, plus or minus 2%.
The company also scaled back its gross margin expectations, going to 44-45% from its previous view of 47%, and said it had also seen an adverse impact because shipments of its next-generation server processor, codenamed Interlagos, happened later in the quarter than anticipated.
The current average estimate of analysts polled by Thomson Reuters is for earnings of 18 cents a share in the September-ending quarter on revenue of $1.72 billion. In its second quarter ended in June, the no. 2 chip maker behind Intel (INTC) posted revenue of $1.57 billion.Shares of AMD were last quoted at $5.64, down 8.3%, on volume of 1.92 million, according to Nasdaq.com. Based on Wednesday's regular session close at $6.15, the stock was already down more than 20% so far in 2011. Intel shares were seeing some selling as well, falling 1.7% to $22.13 on after-hours volume of 5.7 million. AMD said it plans to report its third-quarter results after the closing bell on Oct. 27. Sentiment on the company was weighted to the negative ahead of this news with 22 of the 35 analysts covering the shares at either hold (17), underperform (4) or sell (1) vs. the remainder at either strong buy (9) or buy (4). Intel reports its quarterly numbers on Oct. 18, and Wall Street is looking for a profit of 61 cents a share on revenue of $13.9 billion, a figure that would represent sequential growth from a second-quarter total of $13 billion. --Written by Michael Baron in New York.
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