AMD Shares Drop on Warning
Chipmaker Advanced Micro Devices sank early Friday after warning of soft fourth-quarter sales. The company said late Thursday that fourth-quarter sales, excluding ATI-related segments, would rise 3% sequentially to roughly $1.37 billion. Analysts were looking for $1.44 billion. LR posted this news yesterday in this post.
Early Friday, Citigroup and a slew of brokerages downgraded the stock, citing concerns about margin pressure. Shares were recently off $1.91, or 9.5%, to $18.27 — a five-and-a-half-month low. The chip company said gross margin and operating income, excluding ATI, in the quarter ended Dec. 31, will be substantially lower than in the third quarter because of significantly lower microprocessor selling prices that offset increases in unit sales. AMD in October forecast seasonally strong demand in the fourth quarter.
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