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.

More from Technology

Listen: Should You Buy Cisco Now?

Listen: Should You Buy Cisco Now?

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Amazon Could Devastate Walgreens and Rite Aid by Getting Into Pharmacy Business

Amazon Could Devastate Walgreens and Rite Aid by Getting Into Pharmacy Business

Why PayPal's CEO Doesn't Fear Amazon Entering Mobile Payments

Why PayPal's CEO Doesn't Fear Amazon Entering Mobile Payments

3 Chip Stock Ideas for Value Investors

3 Chip Stock Ideas for Value Investors