Reuters: Global Markets: AMD shares fall on outlook cut

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AMD shares fall on outlook cut Jul 10th 2012, 12:15 Tue Jul 10, 2012 8:15am EDT (Reuters) - Shares of Advanced Micro Devices (AMD.N) fell as much as 10 percent in pre-market trade after the chipmaker slashed its sales outlook, prompting a slew of brokerages to cut their price targets on the stock. AMD cut its second-quarter revenue forecast on Monday after seeing disappointing sales in China and Europe, becoming one of the biggest technology companies to date to warn that a global economic slowdown is taking a harsher-than-expected toll. The company joined software firms Qlik Technologies (QLIK.O) and Informatica Corp (INFA.O) in issuing estimates far below market forecasts â€" an early indication of potentially weak earnings from tech companies this earnings season. AMD, which faces competition from Intel Corp's (INTC.O) newest personal computer (PC) chip, code-named Ivy Bridge, is likely to remain under pressure due to weak demand for PCs and Intel's superior products, J.P. Morgan said in a note to clients. The technology bellwether said in April Ivy Bridge would drive sales later this year and power a new crop of super-thin laptops dubbed "ultrabooks." "We suspect 2Q12 marks the worst quarter of the year (for AMD), exacerbated by the impact of Intel's Ivy Bridge launch," Citigroup analysts said. The personal computer (PC) supply chain has been reluctant to build inventories, even in light of the forthcoming Windows 8 launch, the Citi analysts wrote in a client note. "(AMD's) lack of a meaningful tablet roadmap could negatively impact revenue as mainstream notebooks are cannibalized by tablets," said analysts at Canaccord Genuity, who cut their price target on AMD to $7 from $10. <RCH/US> The company's shares, which have lost 40 percent of their value after touching a year-high in March, were down 10 percent at $5.05 in pre-market trade. They closed at $5.62 on the New York Stock Exchange on Monday. (Reporting by Sagarika Jaisinghani and Aurindom Mukherjee in Bangalore; Editing by Saumyadeb Chakrabarty) Link this Share this Digg this Email Reprints

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