AMD Cuts Q2 Revenue Outlook

(RTTNews) - Chipmaker Advanced Micro Devices, Inc. (AMD) it now expects second quarter revenue to decrease about 8% sequentially, compared to its prior guidance of down 3%, plus or minus 3%.

Analysts polled by Thomson Reuters currently expect the company to post second quarter revenue of $999.55 million, implying a sequential decline of about 3%.

The sequential decrease is mainly due to weaker than expected consumer PC demand impacting the company's Original Equipment Manufacturer APU sales, AMD said in a statement.

The company expects second quarter channel sales and channel inventory reduction efforts to be in-line with its plans.

The Sunnyvale, California-based company also said it now expects second quarter adjusted gross margin to be approximately 28%, compared to its prior guidance of about 32% mainly due to a higher mix of Enterprise, Embedded and Semi-Custom segment sales and lower than anticipated Computing and Graphics segment APU unit volumes due to weaker than expected OEM PC product demand.

Additionally the company anticipates GAAP gross margin to be further impacted by a one-time charge of about $33 million associated with a technology node transition from 20 nanometer to FinFET. The company started several product designs in 20nm that will instead transition to the leading-edge FinFET node.

AMD will report second quarter financial results after market close on July 16.