Advanced Micro Devices Inc., the chipmaker struggling to compete with Intel Corp., said second-quarter sales declined more than it had originally projected, citing weak consumer demand for personal computers.
Revenue dropped about 8 percent from the first quarter, compared with an earlier forecast for sales to fall about 3 percent, the Sunnyvale, California-based company said Monday in a statement. AMD will report results for the quarter on July 16.
AMD’s disappointing outlook adds evidence that the PC industry has failed to lure consumers away from smartphones and tablets back to laptops. Last month, Micron Technologies Inc. predicted sales this quarter will be worse than analysts’ estimates. AMD also has been hurt by order losses to Intel, which had grabbed market share amid a four-year industry slump.
The chipmaker’s projection indicates sales of about $947.6 million, compared with an average analyst estimate of $999.5 million, according to data compiled by Bloomberg. Quarterly revenue will be less than $1 billion for the first time in at least a decade. Minus certain items, gross margin, or the percentage of sales remaining after deducting the cost of manufacturing, will be about 28 percent, narrower than the 32 percent it had predicted. AMD said it ended the quarter with $830 million in cash.
AMD dropped as much as 15 percent in extended trading following the announcement. Earlier, the shares fell 2.4 percent to $2.47 at the close in New York.
The company’s shares, which have declined 7.5 percent this year, have jumped 9.8 percent since June 1 amid speculation that AMD might be an acquisition target during a record year for industry deals.