Advanced Micro Devices Inc (AMD), the No. 2 maker of computer processors, gave a disappointing third-quarter sales forecast, indicating lower-than-expected orders for game-console chips from Microsoft Corp and Sony Corp, two of its biggest customers.
Revenue this quarter would be about US$1.8 billion, Santa Clara, California-based AMD said in a statement on Tuesday.
That missed the average of analysts’ projections of US$1.94 billion, according to a survey by Bloomberg.
The company also pared its forecast for annual revenue.
Chief executive officer Lisa Su (蘇姿豐) is trying to remake her company into more than just a purveyor of cut-price alternatives to Intel Corp’s PC chips.
While sales of PC-related products are improving, the company said revenue is taking a hit, because demand from game-console makers is falling short of its original forecasts this year.
In the second quarter, revenue in the division that includes server processors and custom chips for consoles declined 12 percent, AMD said.
Console sales are dropping as the current versions of Microsoft’s Xbox and Sony’s PlayStation are in their seventh year of life and the companies have started talking about their replacements.
Su, the chip industry’s first female chief executive officer, said her company is where she had hoped it would be in terms of unveiling competitive chips, and AMD is ready to take back share from Intel, whose products still garner 90 percent of revenue in the processor market.
As the year progresses, more of AMD’s recently announced chips would be available in electronic devices, boosting the company’s market footprint, she said.
“There’s a real pull for the products,” Su said. “I feel really good about the customer engagements.”
The company’s second-quarter net income fell to US$35 million, or US$0.03 a share, compared with US$116 million, or US$0.11, a year earlier.
Excluding certain items, profit in the recent period was US$0.08, matching analyst predictions. Revenue was US$1.53 billion, 13 percent lower than a year earlier, but topping analysts’ average projection of US$1.52 billion.
Gross margin widened to 41 percent in the second quarter, in line with the average analyst estimate.
A year earlier, that measure of profitability came in at 37 percent.
AMD said it now expects full-year revenue to gain at a percentage in the mid-single digits, compared with an earlier prediction for annual sales to rise in the high-single digits.
Analysts had projected an annual sales increase of about 6 percent.
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