AMD Blames Poor Q2 Results on Soft Sales in China and Europe

Advanced Micro Devices (AMD) saw its share price drop by more than 8 percent after announcing preliminary second quarter financial results with lower than expected sales numbers. The chip designer told investors it expects revenue to dip around 11 percent sequentially in Q3, which is in sharp contrast to a previous forecast of a 3 percent gain, plus or minus 3 percent.

"The lower preliminary revenue results are primarily due to business conditions that materialized late in the second quarter, specifically softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the company's Original Equipment Manufacturer (OEM) business," AMD explained.

AMD Processor
Image Source: Flickr (Matthew Riegler)

Some are blaming AMD's struggles on the rise in popularity of tablet PCs, a category that has been dominated by ARM processors up to this point. AMD also faces stiff competition from Intel's well received Ivy Bridge platform, which sits in the driver's seat of the latest generation of Ultrabooks.

Read more about AMD's situation as analysts tussle over how much the company is worth.