AMD earnings disappoint, shares tank
Wider-than-expected loss in sharp contrast to other techs. Stock falls more than 12%.
SAN FRANCISCO (Reuters) -- Advanced Micro Devices Inc. posted a wider than expected loss and disappointing margins Tuesday, sending its shares spiraling more than 12% lower.
The company said second quarter gross margins -- which it called "disappointing" -- slid to 37% from 43% in the previous quarter. And it forecast that chip revenues would rise just marginally in the current quarter.
AMD's (AMD, Fortune 500) tepid showing stood in stark contrast to much-larger rival Intel Corp., (INTC, Fortune 500) which surprised markets this month and lifted industry sentiment by reporting sharply better than expected earnings.
"While we increased cash, exceeded our revenue plan and reduced operating expenses in the second quarter, gross margin was disappointing," CEO Dirk Meyer said in a statement.
Investors had hoped rosy forecasts from Intel, and to a lesser degree IBM (IBM, Fortune 500), signaled the tech industry slump might have hit bottom.
Also Tuesday, Apple Inc. (AAPL, Fortune 500) blew past quarterly expectations.
But AMD, which has struggled to safeguard its market share against Intel, reported a net loss in the second quarter ended June 27 of $335 million, or 49 cents a share.
Excluding certain items, AMD posted a 62 cent loss, compared with the 53 cent loss forecast by analysts, according to Reuters Estimates.
Revenue slid 13% from a year ago to $1.18 billion from $1.36 billion, a tad above expectations of $1.13 billion.
AMD, which has effectively split itself into a chip designer and a semiconductor foundry, said revenues from the chip arm would be "up slightly" in the fiscal third quarter.
In contrast, Intel, saying consumer PC demand was improving, projected current-quarter revenue far above Wall Street forecasts.
The shares of Sunnyvale, Calif.-based AMD fell more than 12% in after-hours trading after closing down 2.16% at $4.08 on the New York Stock Exchange. 
