Slower sales in China, Europe hit AMD in the bank
AMD's Q2 results were hit by slow sales in China and Europe, and lower consumer spending
IDG News Service - Advanced Micro Devices expects its second-quarter revenue to drop by 11 percent from the first quarter due to slow sales in China and Europe, the company said Monday.
AMD had said previously that its revenue for the quarter, ended June 30, would increase by 3 percent sequentially, plus or minus 3 percent. For the first quarter, it reported revenue of US$1.59 billion and a loss of US$590 million after charges.
AMD released its new Trinity chips for PCs in the second quarter, and had expected those and other products to help expand its sales. It blamed the lower forecast on "business conditions that materialized late in the second quarter."
Along with the slowdown in China and Europe, weak consumer spending affected AMD's OEM (Original Equipment Manufacturing) business, suggesting PC makers bought fewer chips than expected.
The PC market has been growing at a slower-than-expected pace, with more interest in tablets and smartphones for computing. Analysts have predicted weak PC sales growth in the second quarter.
Macroeconomic problems in China, Europe and the U.S. may have softened AMD's business, said Dean McCarron, principal analyst at Mercury Research.
"We're dealing with a global economic problem that affected PC and microprocessor sales," McCarron said, adding that corporate and consumer purchases are also slowing in the U.S.
AMD's business is largely conducted at the consumer level, so it'll feel a larger impact than rival Intel, McCarron said. There will be some impact to Intel, but the effect will be softened by the enterprise business, which is more stable.
The numbers released Monday were preliminary. AMD is due to report its full second-quarter results on July 19.
- Aberdeen Group: Marketing Analytics for Manufacturing: Forging Customer Insights There are no recalls for poor marketing. Manufacturers need to get their customer intelligence and messaging right the first time. Learn how.
- The Brave New World of Customer-Centric Manufacturing The Unique Opportunity for Manufacturers to Better Understand their Consumers
- See the Possibilities Utilizing Data Visualization Do you simply want to collect data, or do you want to derive business insights from it? What if you could quickly and...
- Improving IT Efficiencies: Four Advantages of Multi-Tenant Data Centers Increasing demands on IT are forcing organizations to rethink their data center options. For many organizations, that means turning to the flexibility afforded...
- NSS Labs & Cisco Present: Evaluating Leading Breach Detection Systems Today's constantly evolving advanced malware and APTs can evade point-in-time defenses to penetrate networks. Security professionals must evolve their strategy in lockstep to...
- Will the Real Endpoint Threat Detection and Response Please Stand Up? This webinar explores new technologies & process for protecting endpoints from advanced attackers as well as the innovations that are pushing the envelope... All IT Industry White Papers | Webcasts