Advanced Micro lowers Q3 revenue and gross margin guidance due to lower than expected PC demand and a significant inventory correction in PC supply chain
4:18 PM ET 10/6/22 | Briefing.com
Co lowers guidance, sees Q3 revenue of approximately $5.6 bln vs. prior guidance of $6.7 bln, +/- $200 mln, and vs. the $6.69 bln S&P Capital IQ consensus estimate.Sees Data Center revenue of ~$1.6 bln, up 45% yr/yr.Sees Gaming revenue of ~$1.6 bln, up 14% yr/yr.Sees Client revenue of ~$1.0 bln, down 40% yr/yr.Preliminary results reflect lower than expected Client segment revenue resulting from reduced processor shipments due to a weaker than expected PC market and significant inventory correction actions across the PC supply chain.Lowers non-GAAP gross margin outlook to about 50% from 54%. Te gross margin shortfall to expectations was primarily due to lower revenue driven by lower Client processor unit shipments and average selling price (ASP). In addition, the third quarter results are expected to include approximately $160 million of charges primarily for inventory, pricing, and related reserves in the graphics and client businesses.Non-GAAP operating expenses are lower than previous expectations of $1.6 billion driven by lower variable compensation expenses in the quarter."While our product portfolio remains very strong, macroeconomic conditions drove lower than expected PC demand and a significant inventory correction across the PC supply chain. As we navigate the current market conditions, we are pleased with the performance of our Data Center, Embedded, and Gaming segments and the strength of our diversified business model and balance sheet. We remain focused on delivering our leadership product roadmap and look forward to launching our next-generation 5nm data center and graphics products later this quarter."
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