Why Advanced Micro Devices Shares Shrank
Jul 20th 2012 4:32PM
Updated Jul 20th 2012 4:34PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Advanced Micro Devices (NYS: AMD) have shrunk by as much as 14% today after the company reported second quarter results along with soft guidance.
So what: Revenue fell 10% from last year to $1.4 billion, resulting in net income of just $37 million, or $0.05 per share. CEO Rory Read cited overall macro weakness, soft consumer demand, and lower demand internationally for the tough quarter.
Now what: Read also said the company was taking definitive steps to boost performance and fix problems, but that next quarter is also expected to be challenging. AMD expects next quarter's revenues to fall by 1% sequentially, plus or minus 3%. The figures show that chip giant Intel is chipping away at AMD's already smaller market share in both PCs and servers.
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