AMD Shares Plunge as Sales Forecast Trails EstimatesIan King
Advanced Micro Devices Inc. fell by the most in two years after the chipmaker forecast third-quarter sales that may miss analysts’ estimates, an indication it may be losing orders to Intel Corp.
Revenue will rise 2 percent from the second quarter, plus or minus 3 percent, the Sunnyvale, California-based company said in a statement yesterday. That would equal a range of $1.43 billion to $1.51 billion, and compares with an average analyst estimate of $1.57 billion, according to data compiled by Bloomberg.
The projection may indicate that AMD isn’t benefiting from a rebound in corporate spending on computers that has buoyed other companies in the personal-computer industry. Under Chief Executive Officer Rory Read, AMD is trying to get into new markets -- such as game consoles -- where it doesn’t compete directly with Intel, its much larger rival in PC processors.
“There was some hope that the positive for Intel would bleed over into AMD,” said Cody Acree, an analyst at Ascendiant Capital Markets LLC. He recommends buying AMD shares. “They’re missing out on something that Intel is seeing. AMD is just not there yet. They’ve historically had a weak enterprise share.”
AMD said second-quarter sales in its computing solutions unit declined 20 percent from a year earlier, hurt by reduced shipments of microprocessors. Intel said July 16 that quarterly revenue in its PC processor division rose 6.2 percent.
AMD shares declined 16 percent to $3.83 at the close in New York, the worst one-day decline since October 2012.