AMD loss bigger than expected as PC sales remain weak




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. chipmaker Advanced Micro Devices Inc a bigger--expected adjusted loss and a steep fall sales for the first quarter and said it expected weak demand for personal computers to continue for some .

Shares the company, which also said it would exit the dense server system business, fell more 8 percent extended trading on Thursday.

Chief Lisa Su said the PC would remain challenged as original equipment manufacturers focus on lean inventories.

The company, which said October it would cut 7 percent its workforce, has been shifting its focus to gaming consoles and low-power servers to combat falling laptop sales.

But progress has lagged Wall Street’s expectations due to continued weak PC and graphic sales as well as intense competition from Intel Corp.[pro_ad_display_adzone id=”10″]

Personal computer shipments fell 5.2 percent in the first three this year, extending three years declines, according to firm Gartner.

“It looks like the channel inventory dynamics that they have been struggling with for the past 2 quarters is continuing and their margins are under pressure,” Raymond James analyst Hans Mosesmann said.

Su, however, said she expects business to pick up in the second half of the year, pivoting hopes on the of Windows 10 and new product offerings by the company.

The dense server system business, formerly known as SeaMicro, helps firms reduce power consumption and space efficiency for data centers.

The company said it recorded a charge of $75 million in the first quarter related to the sale of the business as well as an additional $12 million charge related to a restructuring last year.

AMD’s net loss widened to $180 million, or 23 cents per share, in the quarter ended March 28 from $20 million, or 3 cents per share, a year earlier.

Excluding items, AMD a loss of 9 cents per share, compared with the average analyst estimate of a loss of 5 cents, according to Thomson Reuters I/B/E/S.

fell 26.2 percent to $1.03 , missing analysts’ average estimate of $1.05 .

AMD forecast current-quarter to fall 3 percent, plus or minus 3 percent, from the first quarter.

That implied of $999.1 million to $969.1 million, below analysts average estimate of $1.13 .

The company’s shares were down 8.4 percent at $2.63 in trading after the bell.

(Reporting By Arathy S Nair and Lehar Maan in Bengaluru; Editing by Savio D’Souza and Saumyadeb Chakrabarty)(Reuters)