AMD has announced that it expects revenue for the quarter ended 27th June 2015 to be lower than previously guided. It had previously told investors that they should expect its Q2 2015 revenue to be down by about 3 per cent plus or minus 3 per cent. After markets closed yesterday it updated the guidance figure to minus 8 per cent. AMD cited "weaker than expected consumer PC demand," as the root cause of the adjustment.
The weaker demand for PC impacted directly on AMD's OEM APU sales. The company's increasing reliance on Enterprise, Embedded and Semi-Custom segment sales and decreasing Computing and Graphics segment sales will impact the gross margin it achieves.
AMD also told investors that as a result of the technology node transition from 20nm to FinFET a one-time charge of $33 million will be seen on the books this quarter. Several chip designs that were going to be 20nm products will now go straight to "the leading-edge FinFET node".
Due to this updated outlook statement AMD shares have fallen as much as 15 per cent in after hours trading, the figure is currently 13 per cent down. Talking to Reuters, Wedbush Securities analyst Betsy Van Hees said "They are going through a big transitions. It's not a one quarter turnaround story, it's going to take multiple quarters for the vision to come to fruition". PC enthusiasts hope that AMD can succeed in its mission to present much fiercer competition to both Nvidia and Intel. AMD has started to release its innovative Fury graphics cards but we are still waiting for the first Zen CPUs.
AMD's Q2 final results are published at the end of next week with a conference call held shortly after.
