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Advanced Micro Devices (NASDAQ:AMD) shares hit a new 52-week-low, falling nearly 14% as the chipmaker issued preliminary third-quarter results that widely missed estimates.
The Dr. Lisa Su-led AMD (AMD) said its third-quarter sales would be about $5.6B, compared to estimates of $6.71B. Adjusted gross margins were roughly 50%, and below the 54% the company had guided to previously.
The company blamed the shortfall on a weaker-than-expected PC market and continued inventory corrections.
AMD's (AMD) Su added that the company's data center, embedded and gaming segments continued to show strength and the company's business model and balance sheet will help it navigate the downturn.
Breaking it down by segment, client revenue fell 53% sequentially and 40% year-over-year to $1B, while data center revenue rose 8% sequentially and 45% year-over-year to $1.6B.
Gaming revenue was flat quarter-over-quarter and up 14% year-over-year to $1.6B, while revenue from its embedded segment was up 4% sequentially to $1.3B, largely thanks to its Xilinx acquisition which closed earlier this year.
The company also said it sees $160M worth of charges for items, including inventory and pricing.
Santa Clara, California-based AMD (AMD) said operating expenses during the period were $1.5B, below the prior guidance of $1.6B.
Bank of America recently reiterated its buy ratings on Advanced Micro Devices (AMD) and several other cloud computing-related semiconductor companies, noting the group is still likely to benefit from increased spending.