AMD Plunges More Than 7% After Announcing Largely In-line Quarterly Earnings

By Jeremy C. Owens Markets MarketWatch Pulse

Advanced Micro Devices Inc. shares dropped more than 7% in late trading Monday after the chip maker announced quarterly earnings largely in-line with analysts' estimates amid the launch of new Ryzen chips. AMD reported a first-quarter net loss of $73 million, or 8 cents a share, on sales of $984 million. After adjusting for stock-based compensation and other effects, the company claimed a loss of 4 cents a share. Analysts on average expected AMD to report an adjusted loss of 4 cents a share on sales of $985 million, according to FactSet; AMD had forecast sales of $951 million to $1.02 billion. While AMD mostly met expectations, the Ryzen launch likely had some investors expecting a beat and raise, but AMD said other factors got in the way of a big Ryzen bump. Revenue in the PC group declined sequentially, which AMD said "was primarily due to a decrease in mobile and graphics processor sales largely offset by initial revenue from high performance Ryzen desktop processors." The company's forecast was also on target with Wall Street forecasts, as AMD said the current quarter's sales should rise 17% from the past quarter, plus or minus 3%, which would put the midpoint of the forecast at roughly $1.15 billion in revenue. Analysts on average were expecting a forecast of $1.12 billion, according to FactSet. AMD shares have more than tripled in the past year, gaining 283.7% in that time as the S&P 500 index has increased 15.7%, but they took a hit Monday afternoon, dropping to less than $12.60 after closing with a 2.4% gain at $13.62.

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