AMD Slides on Weak Revenue

NEW YORK ( TheStreet) - AMD ( AMD) shares slid in extended trading on Thursday after the no.2 chip maker released weaker-than-expected preliminary third-quarter numbers.

The Intel ( INTC) rival now expects third-quarter revenue of approximately $1.27 billion, a sequential decline of around 10%. Previously, AMD had predicted a sequential decrease of 1%, plus or minus 3%. Analysts surveyed by Thomson Reuters were looking for sales of $1.38 billion.

"The lower than anticipated preliminary revenue results are primarily due to weaker than expected demand across all product lines caused by the challenging macroeconomic environment," noted AMD, in a statement released after market close.

AMD also expects a third-quarter gross margin of approximately 31%, less than its prior forecast of approximately 44%. The change is primarily the result of an inventory write-down of approximately $100 million due to lower anticipated future demand for certain products, according to the Sunnyvale, Calif.-based firm.

Operating expenses are expected to decline approximately 7% sequentially to $521.73, with AMD citing "tightly controlled expenses in the quarter" for the change.

The numbers pushed AMD's shares down 7.5% to $2.96 after market close. AMD's stock had gained 1.59% during Thursday's regular trading.

Last month Intel lowered its third-quarter outlook, citing the ongoing effects of a tough economic environment.

-- Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

If you liked this article you might like

7 Essential Rules for Investing in Tech Stocks

Wall Street Deflates in Pullback After Fed Excitement, No Records for Dow

Your Guide to Making a Lot of Money on the Driverless Car Boom