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SiliconAsia
It will be interesting to see how this will impact GF's revenue. AMD still is a ...
goafrit
This company is living in the past. I do not see how AMD can survive this decade
AMD warns of Q3 sales shortfall
Dylan McGrath
10/11/2012 5:37 PM EDT
SAN FRANCISCO—Advanced Micro Devices Inc. (AMD) Thursday (Oct. 11) warned that its third quarter sales were lower than previously expected due to weaker demand across all product lines caused by macroeconomic difficulties.
AMD (Sunnyvale, Calif.) said preliminary results show that the company's revenue declined about 10 percent sequentially to $1.27 billion in the third quarter, which closed Sept. 29. AMD had previously said it expected sales to be between and $1.38 billion and $1.4 billion, a range of 1 percent to down 3 percent sequentially.
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AMD's third quarter sales warning comes one day after market research firms reported that third quarter PC sales were down more than 8 percent compared with the third quarter of 2011. Another market research firm, IHS iSuppli, predicted Wednesday that total PC shipments will decline this year for the first time since 2001. AMD is the No. 2 supplier of PC processors.
""The PC end market appears weakest due to soft global demand and share loss to tablets," said Christopher Danely, an analyst with JP Morgan, in a report circulated late Thursday. "Looking ahead to 4Q12, we do not expect Windows 8 to be a catalyst as new operating systems have not driven a major upgrade cycle since 1995."
AMD said it now expects its gross margin for the quarter to decline to about 31 percent, less than the previous estimate of 44 percent. AMD said it cut its gross margin estimate due to a $100 million inventory write-down for lower anticipated demand for certain products.
Third quarter gross margin was also negatively impacted by weaker-than-expected demand, which contributed to lower average selling prices for the company’s processors and lower utilization of AMD's back-end manufacturing facilities, the company said.
"We believe AMD lowered prices to clear inventory as its inventory was 98 days in 2Q12, well above its five-year average of 64 days," Danely said.
AMD said its third quarter operating expenses are expected to decline about 7 percent from the second quarter as a result of tight expense controls. The company is expected to report its full third quarter results on Oct. 18.
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AMD (Sunnyvale, Calif.) said preliminary results show that the company's revenue declined about 10 percent sequentially to $1.27 billion in the third quarter, which closed Sept. 29. AMD had previously said it expected sales to be between and $1.38 billion and $1.4 billion, a range of 1 percent to down 3 percent sequentially.
[Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.]
AMD's third quarter sales warning comes one day after market research firms reported that third quarter PC sales were down more than 8 percent compared with the third quarter of 2011. Another market research firm, IHS iSuppli, predicted Wednesday that total PC shipments will decline this year for the first time since 2001. AMD is the No. 2 supplier of PC processors.
""The PC end market appears weakest due to soft global demand and share loss to tablets," said Christopher Danely, an analyst with JP Morgan, in a report circulated late Thursday. "Looking ahead to 4Q12, we do not expect Windows 8 to be a catalyst as new operating systems have not driven a major upgrade cycle since 1995."
AMD said it now expects its gross margin for the quarter to decline to about 31 percent, less than the previous estimate of 44 percent. AMD said it cut its gross margin estimate due to a $100 million inventory write-down for lower anticipated demand for certain products.
Third quarter gross margin was also negatively impacted by weaker-than-expected demand, which contributed to lower average selling prices for the company’s processors and lower utilization of AMD's back-end manufacturing facilities, the company said.
"We believe AMD lowered prices to clear inventory as its inventory was 98 days in 2Q12, well above its five-year average of 64 days," Danely said.
AMD said its third quarter operating expenses are expected to decline about 7 percent from the second quarter as a result of tight expense controls. The company is expected to report its full third quarter results on Oct. 18.
Related stories:
- Ultrabook shortfall trims outlook for SSDs
- HP, Lenovo in dead heat for PC market lead
- Can Windows 8 rescue the PC?
- Lenovo launches laptop-tablet hybrids
- Ultrathin PC sales expected to surge as prices decline
- Foundry sales growth hitting the skids
- AMD wants graphics processors to run Java
- AMD fabric takes first step to broader market
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goafrit
10/11/2012 7:33 PM EDT
This company is living in the past. I do not see how AMD can survive this decade
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SiliconAsia
10/12/2012 11:23 AM EDT
It will be interesting to see how this will impact GF's revenue. AMD still is a major part of GF's revenue stream.
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