AMD (AMD) Paints Sobering Picture of PC Market, Says New Paradigm Forming
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How does Advanced Micro Devices (NYSE: AMD) view the PC market? If it had a choice, probably from far away. Very, very far away.
According to CEO Rory Read, the most recent quarter ended a streak of three consecutive quarters in which PC shipments have showed declines. The last time a three-quarter span of lower PC shipments occurred was in 2001. In addition, Read said that shipments have been below historical averages over the last seven quarters.
Will things get better? Is the worst behind us, letting the PC market now spread its wings and shine? No. According to read, "[w]e expect macro headwinds will continue for the third quarter."
Things have gotten bad enough, according to Read, that a paradigm shift is happening. He said AMD also believes "the PC industry may be resetting to a new baseline and that full year industry growth estimates will be reduced."
AMD now sees full-year 2012 processor shipments in the low-single-digit range. Previously, AMD was expecting simply single-digit growth.
Comments are a turn from last quarter, when Read said "we're excited about the opportunities in front of us. And we know we have the right ingredients to win and grow."
Looking to the next quarter. AMD also said it sees sales down one percent, +/- three percent. That's sobering when compared with the 14 percent average growth from the second to third quarter, according to one analyst from Northland Capital Markets.
On July 9th, AMD issued an interim update, cutting second-quarter expectations due. The Company cited softer demand in China and Europe, "as well as a weaker consumer buying environment impacting the company's Original Equipment Manufacturer (OEM) business."
After the market closed Thursday, AMD couldn't even meet the Street's lowered earnings expectations, posting EPS of 6 cents versus the consensus of 7 cents. Res of $1.41 billion also fell short of the $1.63 billion expected.
Many of the tech powerhouses have reported already, with Microsoft (Nasdaq: MSFT) and Google (Nasdaq: GOOG) two of the latest. Traders will keep an eye on Hewlett-Packard (NYSE: HPQ) and Apple (Nasdaq: AAPL), which are expected to release quarterly results in mid-August and July 24th, respectively.
For its part, Microsoft posted a GAAP loss Thursday, but ended up topping expectations when cleaning up numbers. Google also bested the Street, with a 16 percent jump in profit.
The stock is down 3.5 percent in early trading Friday.
According to CEO Rory Read, the most recent quarter ended a streak of three consecutive quarters in which PC shipments have showed declines. The last time a three-quarter span of lower PC shipments occurred was in 2001. In addition, Read said that shipments have been below historical averages over the last seven quarters.
Will things get better? Is the worst behind us, letting the PC market now spread its wings and shine? No. According to read, "[w]e expect macro headwinds will continue for the third quarter."
Things have gotten bad enough, according to Read, that a paradigm shift is happening. He said AMD also believes "the PC industry may be resetting to a new baseline and that full year industry growth estimates will be reduced."
AMD now sees full-year 2012 processor shipments in the low-single-digit range. Previously, AMD was expecting simply single-digit growth.
Comments are a turn from last quarter, when Read said "we're excited about the opportunities in front of us. And we know we have the right ingredients to win and grow."
Looking to the next quarter. AMD also said it sees sales down one percent, +/- three percent. That's sobering when compared with the 14 percent average growth from the second to third quarter, according to one analyst from Northland Capital Markets.
On July 9th, AMD issued an interim update, cutting second-quarter expectations due. The Company cited softer demand in China and Europe, "as well as a weaker consumer buying environment impacting the company's Original Equipment Manufacturer (OEM) business."
After the market closed Thursday, AMD couldn't even meet the Street's lowered earnings expectations, posting EPS of 6 cents versus the consensus of 7 cents. Res of $1.41 billion also fell short of the $1.63 billion expected.
Many of the tech powerhouses have reported already, with Microsoft (Nasdaq: MSFT) and Google (Nasdaq: GOOG) two of the latest. Traders will keep an eye on Hewlett-Packard (NYSE: HPQ) and Apple (Nasdaq: AAPL), which are expected to release quarterly results in mid-August and July 24th, respectively.
For its part, Microsoft posted a GAAP loss Thursday, but ended up topping expectations when cleaning up numbers. Google also bested the Street, with a 16 percent jump in profit.
The stock is down 3.5 percent in early trading Friday.
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