Advanced Micro Devices, Inc. (NASDAQ: AMD) is having an overwhelmingly rough start to the trading session in the pre-market hours this morning, and for good reason. The company released its earnings for the third quarter, and while the report was relatively positive, guidance simply was not. Of course, this led to fear among investors, sending the stock tumbling toward the bottom. As is almost always the case, our partners at Trade Ideas were the first to alert us to the losses. At the moment (8:44), AMD is trading at $12.98 per share after a loss of $1.27 per share or 8.91% thus far today.
AMD Falls Hard On Updated Guidance
As mentioned above, Advanced Micro Devices is having an overwhelmingly rough start to the trading session this morning after the company released its earnings for the third quarter. While both earnings and revenue proved to be positive, the company concerned investors with regard to expectations for the fourth quarter. Here’s what we saw from the report:
- Earnings Per Share – In terms of earnings per share, AMD did overwhelmingly well. During the quarter, analysts expected that the company would generate earnings in the amount of $0.08 per share. However, the company actually reported earnings in the amount of $0.10 per share, beating expectations with a relatively strong earnings surprise.
- Revenue – Revenue also proved to be a positive hit point on the AMD earnings report. During the quarter, analysts expected that the company would generate revenue in the amount of $1.51 billion. However, the company actually reported revenue in the amount of $1.64 billion; once again, outpacing expectations.
- Guidance – While earnings and revenue proved to be overwhelmingly positive, the big concern for the company had to do with guidance. In fact, the company said that it is expecting a sequential decline in revenue in the amount of 15% in the fourth quarter. Obviously, investors are looking for growth, not declines. So, this is why Advanced Micro Devices is tumbling downward today.
Nonetheless, Lisa Su, CEO at AMD sees the report as overwhelmingly positive, saying, “Strong customer adoption of our new high-performance products drove significant revenue growth and improved financial results from a year ago…”
Nonetheless, investors are far from happy. Sure, AMD produced strong revenue and earnings. However, that is all in the past. What investors are concerned with is the future, and right now, all they seem to be paying attention to is the expectations of a sequential 15% decline in revenue in the fourth quarter.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AMD. In particular, we’re interested in following the company’s sales of the new, higher-end products and whether or not revenue will outpace the light expectations set by the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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