AMD disappoints with poor third-quarter outlook

AMD shares are down 6.55 percent in after-hours trading to $31.65 as the chip designer is selling less product than hoped. The company announced second-quarter revenue of $1.53 billion and GAAP net income of $35 million. The revenue is slightly higher than analyst estimates, and adjusted, non-GAAP earnings per share came in at 8 cents per share, which is in-line with estimates.

However, the big shocker in the earnings report is the outlook for the current quarter. AMD anticipates sales of $1.80 billion, plus or minus $50 million, which is an increase of about 9 percent year-over-year. This is quite a bit lower than analyst estimates of $1.94 billion. Given that AMD is still a growth story with a sky high valuation, it's no surprise that these sort of things cause the stock to get hammered.

“I am pleased with our financial performance and execution in the quarter as we ramped production of three leadership 7nm product families,” said Dr. Lisa Su, AMD president and CEO. “We have reached a significant inflection point for the company as our new Ryzen, Radeon and EPYC processors form the most competitive product portfolio in our history and are well positioned to drive significant growth in the second half of the year.”

You can check the full earnings report at AMD's website.