[Asia Economy Reporter Jeong Hyunjin] American semiconductor company AMD announced that its third-quarter (July-September) earnings this year will fall significantly short of the previously provided guidance and market expectations due to weak PC demand. Following the earnings announcement, AMD's stock price dropped by more than 4%.
According to Bloomberg and other sources, AMD announced its preliminary third-quarter results, stating that revenue will be around $5.6 billion (approximately 7.9 trillion KRW). This is about $1 billion below the guidance and market expectations of $6.5 billion to $6.9 billion provided when the second-quarter results were announced. If the third-quarter revenue is confirmed at $5.6 billion, it represents a 29% increase compared to the same period last year but a 15% decrease from the previous quarter.
AMD also stated that its third-quarter non-GAAP gross margin will be around 50%, not the initially expected approximately 54%.
The reason AMD reported earnings below expectations is attributed to weakening PC demand. Like its competitors, AMD evaluated that sales in the PC market declined due to reduced demand and inventory buildup in the supply chain. Lisa Su, AMD's CEO, explained, "Our product portfolio remains strong, but the macroeconomic environment caused lower-than-expected PC demand and significant inventory adjustments."
By segment, client segment revenue is estimated to be $1 billion, a 40% decrease compared to the same period last year. In contrast, gaming and data center segment revenues are expected to be $1.6 billion each, representing increases of 14% and 45% respectively compared to one year ago.
After the market closed, AMD's stock price fell more than 4% in after-hours trading following the earnings release.
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