Advanced Micro Devices Inc. fell to its lowest in more than two years after the chipmaker said second-quarter sales declined more than originally projected because of weak consumer demand for personal computers.
Revenue dropped about 8 percent from the first quarter, compared with an earlier forecast of a decline of about 3 percent, the Sunnyvale, California-based company said in a statement after the close of regular trading Monday. AMD, which has struggled to compete with Intel Corp., will report results for the quarter on July 16.
AMD’s shares fell 15 percent to close at $2.09, reaching their lowest point since November 2012. The decline left the stock down 22 percent this year.
The company’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.