Company’s revenues for Q2 of $1.57bn was below $1.65bn in the same quarter last year
Semiconductor company Advanced Micro Devices (AMD) has lowered its sales forecasts for third-quarter sales and profitability.
The company said that manufacturing glitches were the main reason for the downward revision of sales in Q3. The Bloomberg reported that the company shares dropped as much as 11%.
The California-based company said its sales in the period ending 1 October will rise 4% to 6% from the previous quarter, compared with an earlier forecast of 10% growth.
AMD added that gross margin will be 44% to 45% for the quarter, compared with previously projected gross margin of 47%.
Th company said that its chip supplier Globalfoundries is having difficulties with production at its plant in Dresden, Germany. Globalfoundries is a spin-off of AMD’s manufacturing operations that now supplies AMD with chips. The production glitch at Globalfoundries has caused a shortfall of AMD’s latest processors, the company added.
Meanwhile, AMD shares dropped to $5.50 in late trading after the announcement. The stock has fallen 25 percent so far this year, said the report.
Earlier this year, the company had reported $1.57bn in revenues for the second quarter of 2011, slightly below the $1.65bn in the same quarter last year.
Announcing the result, the company had said the slight decrease was primarily driven by lower server revenue, and its computing offerings segment revenue was flat, while higher mobile microprocessor revenues were offset by lower desktop and server revenue.
Accelerating Fusion accelerated processor unit (APU) shipments led to an increase in microprocessor unit shipments and mobile microprocessor unit shipments, AMD said. Graphics segment revenues, however, decreased by 11% for Q2, due to lower discrete mobile unit shipments and seasonality in the desktop discrete graphics add-in board market, AMD had said.
AMD had added that it expected a 10% increase in revenue for Q3 based on stronger expectations for Fusion APUs sales.