AMD shares take a spill after chipmaker’s revenues miss forecasts

Shares in AMD took a hit in extended trading on Monday after the chipmaker said sales in the first quarter climbed less than analysts had forecast.

Shares in the California-based company fell more than 8 per cent after the bell after saying net revenues rose 18 per cent from a year ago to $984m, just shy of analysts estimates of $984.5m. Sales were driven by strong demand for its new Ryzen CPU’s as well as graphics processors.

However, revenues were down 11 per cent sequentially which the company attributed to seasonality in its computing and graphics segment and its enterprise unit.

AMD noted that its quarterly loss narrowed to $73m or 8 cents a share in the three months ended April 1, compared with a loss of $108m or 14 cents a share in the year ago period. That was wider than Wall Street forecasts of a loss of 7 cents.

Adjusting for one-time items, a loss of 4 cents a share was in line with estimates.

AMD clocked annual losses for each of the last five years but its shares surged 295 per cent last year as the company returned to annual revenue growth. The bullish sentiment was also partly fuelled by hopes that new chief executive Lisa Su could help drive a turnround at the company and in anticipation of the “eight-core” Zen processor that is part of its new Ryzen product line.

Looking ahead the company said it expects revenues to rise about 17 per cent sequentially in the current quarter and a low double digit percentage growth for the year.

AMD shares are up 20 per cent so far this year.