AMD shares slide in extended trading after the no.2 chip maker said it expects a sequential decline in revenue of 10% in the third quarter.
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.
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