Advanced Micro Devices Inc. shares plummeted yesterday after the chipmaker's outlook and sales lagged behind Wall Street estimates as graphic sales were weaker than blockchain sales as a negligible part of the business the company were.
which had dropped by up to 25% after hours, were down 22% in the extended session after the company's conference call, equities closed 9.2% at $ 22 , 79 regular trade.
AMD's third quarter revenue increased from $ 1
"Sales of client and server processors grew significantly, although graphic channel sales were lower," said Lisa Su, AMD's chief executive, in a statement.
At the conference, Su said a weak graphics processing unit (GPU) was caused by a decline in blockchain-related sales, including cryptocurrency customers. In the year-ago quarter, Blockchain sales accounted for a "high single-digit percentage" of AMD's sales, while they were "negligible" this quarter, said Chief Financial Officer Devinder Kumar.
Less than a year ago, the price of Bitcoin
reached more than $ 19,000 in December, while the price of ether, the cryptocurrent of etherium blockchain, rose to over $ 1,300 in January. At that time, AMD said that about 10% of GPU sales are related to blockchain sales. On Wednesday, Bitcoin was priced at $ 6,463.01, Ether at $ 201.22
AMD reported third-quarter revenue of $ 938 million for computers and graphics, while analysts expected $ 1.05 billion. The company reported revenues of $ 715 million for businesses, analysts forecast $ 653 million
Su said it expects data center GPU sales to "make a significant contribution" to fourth quarter revenues  "We expect it to take a few quarters to return to a normal channel, but this is reflected in our Q4 guidance," said Su Analysten. For the fourth quarter, AMD estimates sales of $ 1.4 to $ 1.5 billion, while analysts forecast sales of $ 1.6 billion.
The company generated net income of $ 102 million, or 9 cents per share, in the third quarter, compared to $ 61 million. or 6 cents per share, in the same period last year. Adjusted earnings were 13 cents per share.
According to FactSet analysts, AMD should expect adjusted earnings of 12 cents a share. Estimize had demanded a profit of 15 cents a share.
Of the 34 analysts covering AMD, 13 have buy or overweight ratings, 16 have hold ratings and five have sales or underweights with an average price target of $ 25.62
The AMD stock was in a turbulent roller coaster ride, after the company posted its best ever result in seven years in its last report in seven years and recovered to a 12-year high of $ 34.14 in mid-September, an impressive five months, 200% increase, and were 33 % from this peak to near Wednesday.
In addition to the fears of a China trade war and a supply glut, chip maker stocks have led the broader selloff market recently, other chip makers also have weaker expectations than expected.
At the end of the month, the AMD share, with a gain of 122%, continues to be the best performer on the S & P 500 since the start of the year and was the second most active share on the index in the last 52 weeks. In comparison, the S & P 500
has fallen 0.7% for the year, the tech-heavy Nasdaq Composite Index
has risen 3% and the PHLX Semiconductor Index
has fallen by 8.5%.
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