AMD Posts Bigger-Than-Expected Q1 Loss

U.S. chip maker Advanced Micro Devices reported a bigger-than-expected adjusted loss for the first quarter and said it was exiting its dense server system business, effective immediately.

The company also reported a steeper-than-expected fall in quarterly revenue, helping send its shares down more than 8 percent in extended trading.

The company, which said in October it would cut 7 percent of its workforce, has been shifting its focus to gaming consoles and low-power servers to combat falling laptop sales. But progress has lagged Wall Street’s expectations due to continued weak PC and graphic card sales as well as intense competition from Intel.

AMD said on Thursday it would exit the dense server system business, formerly SeaMicro, which helps firms reduce power consumption and improve space efficiency for data centers.

The company said it recorded a related charge of $75 million in the first quarter as well as an additional $12 million charge related to a restructuring plan last year.

AMD’s net loss widened to $180 million, or 23 cents per share, in the quarter ended March 28 from $20 million, or three cents per share, a year earlier.

Excluding items, AMD reported a loss of nine cents per share, bigger than the analysts’ average estimate of five cents, according to Thomson Reuters I/B/E/S.

Revenue fell 26.2 percent to $1.03 billion, missing analysts estimates of $1.05 billion.

AMD forecast current-quarter revenue to fall 3 percent, plus or minus 3 percent, from the first quarter.

That implied revenue of $999.1 million to $969.1 million, below analysts average estimate of $1.13 billion.

The company’s shares were down 8.4 percent at $2.63 in trading after the bell.

(Reporting By Arathy S Nair and Lehar Maan in Bengaluru; Editing by Savio D’Souza)

This article originally appeared on Recode.net.

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