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Advanced Micro Devices, Inc. (NYSE: AMD) could be in for a rough session following the release of its second-quarter results. Last night, AMD confessed to a quarterly loss of $335 million, or 49 cents per share; excluding items, the loss widened to 62 cents per share. While this is certainly an improvement from AMD's year-ago loss of $1.16 per share, the results were notably worse than analysts expected -- consensus estimates called for a loss of just 53 cents per share.
Meanwhile, revenue for the period contracted 13% on a year-over-year basis, dwindling to $1.18 billion. This figure actually managed to exceed consensus estimates, which predicted quarterly sales of $1.13 billion. Unfortunately, margins for the quarter fell sharply from first-quarter levels, dropping from 43% to 37%.
On the heels of this shabby report, AMD gapped sharply lower with the sound of today's opening bell. At their intraday low of $3.41, the shares were off 16.4% from Tuesday's close. Today's swoon ends the equity's brief reign atop its 10-day and 20-day moving averages, which have intermittently acted as support and resistance in recent months.
Short sellers appeared to have called this one correctly, since they ramped up their bearish bets on AMD by 10.3% during the most recent reporting period. Now, short interest accounts for a notable 15.8% of the equity's available float. If any of these skeptics are encouraged to take profits in light of today's plunge, it could help AMD rebound from the worst of its losses.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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