AMD cuts Q3 rev, margin; shares fall

Reuters News
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Posted: Sep 28, 2011 5:29 PM

SEPT 28 - Advanced Micro Devices Inc cut its third-quarter revenue and gross margin forecast, citing manufacturing issues at a German supplier.

Shares of the company fell 8 percent to $5.66 in extended trading. They closed at $6.15 on Wednesday on the New York Stock Exchange.

The company expects third-quarter revenue to be 4-6 percent higher than the second quarter. It had earlier forecast a 10 percent, plus or minus 2 percent, sequential growth.

Analysts, on average, are expecting the company to post revenue of $1.72 billion for the third quarter, according to Thomson Reuters I/B/E/S.

AMD sees third-quarter gross margin to be about 44-45 percent, down from its prior forecast of about 47 percent.

The company said the cut in the revenue forecast was primarily due to yield, ramp and manufacturing issues at Globalfoundries in its Dresden, Germany factory that limited the supply of its "Llano" chips. (Reporting by Siddharth Cavale in Bangalore; Editing by Sriraj Kalluvila)