Advanced Micro Devices' (NYSE:AMD) stock fell sharply in pre-market trading Friday, one day after saying third quarter revenue is likely to drop 10 per cent from the last quarter due to weaker demand for its products, and amid a challenging economy.
The Sunnyvale, California-based company, which makes graphics processors and dynamic random access memory chips, said revenue is now slated to dwindle 10 per cent sequentially.
Previously, the company forecasted sales to fall one per cent, plus or minus three per cent, sequentially.
Analysts polled by Bloomberg expected a per-share profit of two cents, on revenue of $1.4 billion for the period that ended September 29.
Shares, in Friday pre-market trading, lost 8.44 per cent to $2.93 each on the New York Stock Exchange.
Gross margin for the quarter is projected to be 31 per cent, down from a prior view of 44 per cent due to the write-down of inventory worth $100 million.
The company said margins were also crimped by weaker-than-expected demand, which contributed to lower selling prices.
Operating costs, in the third quarter, are expected to fall seven per cent sequentially due to tightly controlled expenses in the quarter, AMD said.
AMD is scheduled to report third quarter results on October 18, after markets close.