(Adds analysts' comments, estimates; share movement)
Jan 21 Chipmaker Advanced Micro Devices Inc
forecast a steeper-than-expected fall in current quarter
revenue, signaling that sales of gaming consoles were not
growing fast enough to offset slowing PC sales.
Shares of the company, whose processors are used in
Microsoft Corp's and Sony Corp's
latest game consoles, were down about 11 percent after the bell.
The stock has risen 15 percent in the past month.
"When you look at the stock action going into earnings,
there was some expectation that consoles would drive better
growth in the first quarter," Evercore Partners analyst Patrick
AMD has long competed against larger rival Intel Corp
to supply chips for PCs, but as consumers buy fewer
laptops and desktops, the company is looking at gaming consoles
to drive revenue growth.
Microsoft sold more than three million Xbox Ones, while Sony
said PlayStation 4 sales reached 4.2 million from their launch
in November to the end of the year.
AMD on Tuesday said it expects revenue to decrease 16
percent, plus or minus 3 percent, in the first quarter, compared
with the fourth quarter ended Dec. 28.
This translates to revenue of about $1.34 billion, plus or
minus 3 percent. Analysts on average were expecting revenue of
$1.36 billion, according to Thomson Reuters I/B/E/S.
Sales of AMD's chips used in PCs, its core business, fell 13
percent in the fourth quarter. The business accounted for over
45 percent of total revenue in the quarter. Total revenue rose
37 percent to $1.59 billion.
Last week Intel gave a lukewarm forecast for first-quarter
revenue that did little to dispel concerns about a slowing PC
AMD's net profit was $89 million, or 12 cents per share, in
the quarter, compared with a loss of $473 million, or 63 cents
per share a year earlier.
Excluding items, AMD earned 6 cents per share.
Analysts on average were expecting a profit of 5 cents per
share on revenue of $1.54 billion.
Shares of the company were trading at $3.77 after the bell.
They closed at $4.17.
(Reporting by Neha Alawadhi in Bangalore; Editing by Savio