AMD reports $1 billion Q3 sales miss estimates

More than $1 billion was missed by Bloomberg - Advanced Micro Devices Inc. in the third quarter of sales, adding to worries about the sputtering market for personal-computer chips and sending its shares in late trading.

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Revenue in the period was $5.6 billion, the company said in a statement, giving an early peek at numbers that were expected to be in the coming weeks. The average analyst estimate and the company's own forecast had been about $6.7 billion.

AMD blamed the PC market for hurting sales, citing weaker demand and a build-up of inventory in the supply chain. The company said that there will be $160 million in writedowns related to inventory, pricing and other issues in the third quarter.

Nvidia Corp. and Intel Corp. have shaved billions off their projections and said they need to burn off stockpiles of unused parts.

AMD has made market-share gains at Intel's expense, but the company isn't immune to the collapse in demand for PCs. Consumers who splurged on technology during the Pandemic lock down are now cutting back spending on big-ticket electronics as they confront recession fears and inflation.

The Chief Executive Officer Lisa Su said that while our product portfolio remains very strong, macroeconomic conditions drove lower than expected PC demand and a significant inventory correction.

The stock fell by 4% to $65.10 in extended trading. The shares fell 53% this year, as a result of a broader pullback for the chip industry. Other semiconductors makers, including Nvidia and Intel, also fell after AMD spokesman said.

AMD plans to report full third-quarter earnings on November 1, followed by a conference call to discuss the results. AMD said its gross margin, which is the percentage of sales remaining after deducting costs, will be about 50% in the quarter. That is lower than Intel's once industry-leading profitability levels.

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