The chip maker that was a thorn in Intel's (INTC) side during the PC glory years announced preliminary quarterly results after Thursday's market close. It wasn't pretty. AMD is now eying a roughly 10% sequential decline in revenue, well below its earlier forecast for as much as a 4% slide to a 2% increase in revenue.
Adding insult to injury, the winding road down the income statement only gets worse. Gross margins will clock in at roughly 31% when AMD posts its official results next Thursday, well short of its original gross margins target of 44%.
The company blames weak demand and the "challenging macroeconomic environment" for the soft sales and lower average selling prices, but that's not necessarily news to anyone who's been paying attention. Global PC sales are in a funk, and even the mighty Apple (AAPL) is starting to see a slowdown in its Mac and MacBook sales.
Industry tracker IDC reported earlier this week that global worldwide PC shipments fell 8.6% during the quarter. Things were even uglier closer to home as domestic shipments tumbled 12.4%. AMD hasn't been as successful as Intel in migrating to the portable gadgetry realm of smartphones and tablets, which are selling well.
It's paying the price now.
Other Things Worth Watching
J.B. Hunt Transport Services (JBHT) just keeps on trucking. The trucking and logistics company posted double-digit percentage gains on both ends of its income statement after Thursday's market close. J.B. Hunt's revenue climbed 11% to nearly $1.3 billion, landing just ahead of Wall Street expectations. Earnings rose 14% to $0.65 a share, but that was just short of the $0.66 a share that analysts were forecasting. The market is often torn when a report is mixed, but bulls appear to be winning this war as the improving state of J.B. Hunt's intermodal business is an encouraging sign for the economy in general.
Friday's trading will be heavily influenced by the early morning reports out of JPMorgan Chase (JPM) and Wells Fargo (WFC). The two banking giants kick off an earnings season that promises to be challenging given the many companies expected to post lower income this time around. This is actually the first time in nearly three years that analysts see the S&P 500 companies posting, on average, lower earnings than they did a year earlier. We'll see how this all plays out in the coming days, but at least Wall Street's expecting bottom-line improvement out of JPMorgan Chase and Wells Fargo.
Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Intel, Wells Fargo, Apple, and JPMorgan Chase. Motley Fool newsletter services have recommended writing puts on Intel and creating a bull call spread position in Apple.