AMD and Apple lower revenue forecasts

Apple Computer and Advanced Micro Devices (AMD) have lowered their revenue forecasts, citing a broad weakness in the PC market...

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Apple Computer and Advanced Micro Devices (AMD) have lowered their revenue forecasts, citing a broad weakness in the PC market and slow sales overseas. AMD also warned of a "substantial" operating loss.

Apple now expects to generate $1.40bn (£0.94bn) to $1.45bn (£0.97bn) in revenue for its third fiscal quarter, down from a previous estimate of $1.6bn, the company said. Lacklustre sales to consumers and weak markets in Europe and Japan were given as the reasons behind the revised forecast.

Apple's third quarter ends 30 June and the vendor is due to report its results on 16 July.

AMD also lowered revenue estimates, in its case for the company's second fiscal quarter that ends 30 June, to between $620m and $700m. This figure is down from a previous forecast of between $820m and $900m. The company also said it expects "a substantial operating loss for the quarter," blaming slow PC sales and weak demand for its chips in Europe and North America.

"Our PC processor business is significantly weaker than expected," said Robert Rivet, chief financial officer at AMD. "However, we continue to believe there will be a second half seasonal uptick in demand."

AMD expects to lose some market share to rival Intel, particularly with high priced desktops. Rivet said the company "can't play" as well in that segment of the market. In addition, he said desktop sales in April were "terrible".

On a brighter note, AMD expects to see improvement from its flash memory products targeted at cell phone makers.

The company also sees its business improving against Intel in Asia and Europe.

"There are parts of Asia where we are very pleased with our progress," said Hector de J. Ruiz, president and chief executive officer at AMD. "In the US it is a real battle."

However, the company must still do work to catch up with Intel elsewhere.

"We still refer to China and Latin America as emerging markets where we do not do as well as our competitor," Ruiz said.



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