AMD Shares Slide After Q3 Revenue Forecast as Gaming Chip Demand Wanes
AMD
Advanced Micro Devices Inc. (AMD) - Get Report shares traded sharply lower Wednesday after the chipmaker forecast softer near-term revenues following a second quarter earnings report that was largely in-line with estimates.
AMD said non-GAAP earnings for the three months ending in June came int at 8 cents per share, essentially matching the Street consensus forecast, while revenues fell 13.6% to $1.53 billion and the group's gross margin rose 4 percentage points to 41%
Looking into the quarter quarter, AMD said it sees revenues in the region of $1.8 billion, with a "single digit" percentage increase for the full year when compared to 2018. AMD's gross margin forecast was pegged at 43% for the quarter and 42% for the fully year.
"As we complete the first half of 2019, we have reached a significant inflection point for the Company as we enter our next phase of growth with the most competitive product portfolio in our history," CEO Lisa Su told investors on a conference call late Tuesday. "We have seen some uncertainties across our supply chain driven by tariffs, trade concerns in the US entities list. In the second quarter we stopped shipping to customers added to the US entities list."
"While we remain cautious given the fluidity of the situation, the impact to date has been limited and offset by growing momentum in other parts of our business," she added. "We are executing well to our plans and see a path to significant market share gains for our product portfolio across the PC, gaming and data center markets in the coming quarters."
AMD shares were marked 8% lower Wednesday to change hands at $31.16 each, a move that still leaves the stock with a 72% year-to-date gain.