SUNNYVALE (dpa-AFX) - Shares of Advanced Micro Devices Inc. (AMD), plunged 15 percent in extended trade on Thursday, after the chip maker reported earnings that missed Wall Street estimates by a penny, and detailed a weak third-quarter sales outlook.
Nevertheless, AMD reported a loss for the second quarter that narrowed from a year ago, as revenues grew 24 percent reflecting the strong demand for its chips used in gaming consoles despite continued drop in demand for personal computer chips.
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. However, the company diversified its portfolio and currently make chips for video game consoles in addition to PCs. Computing Solutions segment revenues dropped 20 percent year-over-year, due to decreased microprocessor unit shipments.
The company manufactures semi-customer SOCs for Microsoft's Xbox One and Sony's PlayStation 4, which have been a hit. Graphics and Visual Solutions segment revenues surged 141 percent year-over-year driven largely by increased semi-custom SoC shipments.
Chief Executive Rory Read said, 'Our transformation strategy is on track and we expect to deliver full year non-GAAP profitability and year-over-year revenue growth. We continue to strengthen our business model and shape AMD into a more agile company offering differentiated solutions for a diverse set of markets.'
AMD's revenues for the second quarter increased 24 percent to $1.44 billion from $1.16 billion last year. Analysts polled by Thomson Reuters expected revenues of $1.44 billion for the quarter.
Sunnyvale, California-based AMD's second-quarter loss narrowed to $36 million or $0.05 per share from $74 million or $0.10 per share last year.
Adjusted earnings for the quarter were $17 million or $0.02 per share, compared to a loss of $65 million or $0.09 per share last year. On average, 24 analysts expected earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
Looking ahead to the third quarter, AMD expects revenue to increase 2 percent, plus or minus 3 percent, sequentially. Analysts polled by Thomson Reuters currently estimate revenues of $1.57 billion for the quarter.
AMD closed Thursday's trading at $4.57, down $0.09 or 1.93%, on the NYSE. The stock further plunged $0.70 or 15.32% in after-hours trade.
Copyright RTT News/dpa-AFX
© 2014 AFX News
