Advanced Micro Devices has lowered its revenue guidance for the second quarter by a considerable amount, sending AMD stock plummeting by 10.6 per cent to $5.03 (£3.24).
The chip manufacturer had earlier projected a 3 per cent sequential increase in revenue for its quarter ending on 30 June but announced late on 9 July that it is now expecting an 11 per cent drop in sales from the first quarter of 2012, when AMD reported sales of $1.59 billion (£1 billion).
AMD is scheduled to report its second-quarter earnings on 19 July, two days after the company's larger rival Intel reports.
The company cited "business conditions that materialized late in the second quarter" for the anticipated decline in revenue for the quarter, specifically citing "softer-than-expected channel sales in China and Europe" and weak consumer demand for computing products that was affecting AMD's OEM partners.
Unlike Intel, AMD has struggled to fully emerge from the worldwide economic recession and the shorter term impact on microprocessor sales from last year's hard disk drive shortage caused by catastrophic flooding in Thailand.
AMD did say its operating expenses have improved in the second quarter as "a result of tightly controlled expenses in the quarter." The company said last November that it planned to lay off about 10 per cent of its global workforce by the end of this year's first quarter, or about 1,100 employees.