Advanced Micro Devices (AMD) Cuts Q2 Outlook

Advanced Micro Devices (NASDAQ: AMD) announced that revenue for the second quarter ended June 27, 2015 is expected to be lower than previously guided. The company now expects second quarter revenue to decrease approximately 8 percent sequentially, compared to the previous guidance of down 3 percent, plus or minus 3 percent. The sequential decrease is primarily due to weaker than expected consumer PC demand impacting the company's Original Equipment Manufacturer (OEM) APU sales. The company expects second quarter channel sales and channel inventory reduction efforts to be in-line with the company's plans.

*** The Street sees Q2 revenue of $999.6 million.

The company anticipates non-GAAP gross margin to be approximately 28 percent, compared to the previous non-GAAP guidance of approximately 32 percent primarily 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 approximately $33 million associated with a technology node transition from 20 nanometer (nm) to FinFET. The company started several product designs in 20nm that will instead transition to the leading-edge FinFET node.

Cash and cash equivalents at the end of the second quarter are expected to be approximately $830 million, in line with expectations.

AMD will report second quarter 2015 results after market close on Thursday, July 16, 2015. AMD will hold a conference call for the financial community at 2:30 p.m. PT (5:30 p.m. ET) that day to discuss second quarter financial results and to provide information regarding expected third quarter results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page at http://www.amd.com. The webcast will be available for 10 days after the conference call.

You May Also Be Interested In

• Bristol-Myers Squibb (BMY) stock slips despite earnings beat
• Mobileye (MBLY) misses estimates for Q1 earnings, revenue; shares slip
• Standard BioTools (LAB) Announces Operational Restructuring Plan, Cuts 10% Staff