Advanced Micro Devices shares retreated on Wednesday following the company's mixed second-quarter earnings report. AMD stock dropped in response to the company's soft sales guidance for the current quarter.
The Santa Clara, Calif.-based company late Tuesday said it earned an adjusted $1.05 a share on sales of $6.55 billion in the June quarter. Analysts polled by FactSet expected AMD earnings of $1.03 a share on sales of $6.53 billion. On a year-over-year basis, AMD earnings rose 67% while sales increased 70%.
For the current quarter, AMD forecast revenue of $6.7 billion, up 55% year over year. However, Wall Street was looking for sales of $6.84 billion in the third quarter.
For the full year, AMD now expects to generate sales of $26.3 billion, up 60%. Analysts had predicted sales of $26.21 billion.
AMD Stock Drops After Report
On the stock market today, AMD stock dropped 1.2% to close at 98.09. During the regular session Tuesday, AMD stock rose 2.6% to close at 99.29.
"We delivered our eighth straight quarter of record revenue based on our strong execution and expanded product portfolio," CEO Lisa Su said in a news release. "We see continued growth in the back half of the year highlighted by our next-generation 5-nanometer product shipments and supported by our diversified business model."
AMD's data center chip sales surged 83% year over year to $1.5 billion in the second quarter. But PC chip sales lagged, rising 25% to $2.2 billion.
On Wall Street, eight analysts cut their price targets on AMD stock after the report. However, five analysts raised their price targets.
AMD stock ranks ninth out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 89 out of 99.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
