AMD warns of weak Q3 revenues as PC market is weaker than anticipated

Superior Micro Units preannounced that its third-quarter outcomes can be under its steering on account of a weakening PC market and provide chain challenges.

It’s the newest firm to say it might have a weak quarter, following Nvidia’s announcement that demand in China was falling off a cliff and it was slowing cargo to clear stock channels.

AMD mentioned it expects to report Q3 income of $5.6 billion, down from earlier expectations of $6.7 billion. AMD’s inventory is down 3.8% in afterhours buying and selling to $65.28 a share. The $55.6 billion was up 29% from Q3 2021 and down 15% from the earlier quarter.

AMD now expects the non-GAAP gross margin to be 50%, down from the earlier expectation of 54%.

Shopper income, which was unexpectedly low, was about $1 billion, down 40% from a yr in the past. Gaming was about $1.6 billion, up 14%. And information heart enterprise was $1.6 billion, up 45%. AMD mentioned the embedded enterprise, which benefited from its Xilinx acquisition, was about $1.3 billion.

AMD mentioned the gross margin shortfall was pushed by decrease income on account of decrease shopper processor unit shipments and ASP in addition to about $160 million of stock, pricing and associated fees the corporate took within the quarter for the PC CPU and GPU merchandise.

“Though we anticipated a weak PC market, gross sales to our PC OEMs and the channel had been considerably decrease than anticipated as our companions targeted on decreasing stock ranges throughout the PC provide chain,” AMD mentioned.

The corporate reviews full outcomes on November 1. Third quarter working bills are anticipated to be roughly $2.4 billion and non-GAAP working bills are anticipated to be roughly $1.5 billion. Non-GAAP working bills are decrease than earlier expectations of $1.6 billion pushed by decrease variable compensation bills within the quarter.

“The PC market weakened considerably within the quarter,” mentioned AMD CEO Lisa Su, in an announcement. “Whereas our product portfolio stays very sturdy, macroeconomic circumstances drove decrease than anticipated PC demand and a major stock correction throughout the PC provide chain. As we navigate the present market circumstances, we’re happy with the efficiency of our datacenter, embedded, and gaming segments and the energy of our diversified enterprise mannequin and steadiness sheet. We stay targeted on delivering our management product roadmap and stay up for launching our next-generation 5nm information heart and graphics merchandise later this quarter.”