AMD Q2 Loss Widens, But In Line - Update

(RTTNews) - Advanced Micro Devices Inc. (AMD) Thursday said its second-quarter loss widened from a year ago, as revenues continued to plunge due to weakness in the PC industry. However, the adjusted loss for the quarter was in line with Wall Street expectations.

Sunnyvale, California-based AMD's second-quarter loss widened to $181 million or $0.23 per share from last year's loss of $36 million or $0.05 per share.

Excluding items, adjusted loss for the quarter was $0.17 per share compared to a profit of $0.05 per share a year ago. Seventeen analysts polled by Thomson Reuters estimated a loss of $0.17 per share for the quarter. Analysts' estimates typically exclude special items.

AMD's revenues for the second quarter plunged 35 percent to $942 million from $1.44 billion a year ago. Twenty-four analysts had a consensus revenue estimate of $950.5 million for the quarter.

The company said its revenues dropped largely due to lower sales of client and graphics processor products and ongoing weak PC demand. Computing and graphics segment revenues dropped 54 percent, while enterprise, embedded and semi-custom segment revenues dropped 8 percent year-over-year.

Early this month, AMD had warned of weak revenues for the quarter due to soft consumer PC demand hurting its Original Equipment Manufacturer APU sales.

AMD, known for its processors for personal computers, have been negatively impacted by the slowing demand for PCs and notebooks as tablets and smartphones gained prominence. The company is also losing market share to its larger rival Intel Corp. (INTC) and competition from Nvidia Corp. (NVDA). Meanwhile, the company has diversified its portfolio and currently also makes chips for video game consoles.

Gross margin dropped sharply to 25 percent from 35 percent a year ago.

Looking forward to the third quarter, the company expects revenues to increase 6 percent, plus or minus 3 percent, sequentially. Analysts currently expect revenues of $1.05 billion.

AMD closed Thursday's trading at $1.87, down $0.09 or 4.59%, on the NYSE. The stock, however, gained $0.02 or 1.07% in the after-hours trade.