AMD Announces Cuts Preliminary Q3 Revenues; Expected to Increase 4-6% QoQ from 10% Prior Est
AMD (NYSE: AMD) today announced that revenue for the third quarter ending Oct. 1, 2011 is expected to increase four to six percent as compared to the second quarter of 2011. The company previously forecasted third quarter 2011 revenue to increase 10 percent, plus or minus two percent, from the second quarter of 2011.
In addition, AMD expects third quarter gross margin to be approximately 44 to 45 percent. The company previously forecasted third quarter 2011 gross margin to be approximately 47 percent.
The less-than-forecasted preliminary third quarter 2011 revenue results are primarily due to 32 nanometer (nm) yield, ramp and manufacturing issues at GLOBALFOUNDRIES in its Dresden, Germany factory that limited supply of "Llano". Additionally, 45nm supply was less than expected due to complexities related to the use of common tools across both technology nodes. AMD continues to work closely with its key partner GLOBALFOUNDRIES to improve 32nm yield performance in order to satisfy strong demand for AMD products.
The less-than-forecasted preliminary third quarter 2011 gross margin results are primarily due to less-than-expected supply of "Llano" and associated products with higher average selling price (ASP). Additionally, shipments of AMD's next-generation server processor, codenamed "Interlagos", occurred later in the third quarter than originally anticipated.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.