Advanced Micro Devices sinks as preliminary Q3 sales miss estimates by wide margin
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Advanced Micro Devices (NASDAQ:AMD) fell about 4% in after-hours trading after the semiconductor company reported preliminary third-quarter results that missed estimates by a wide margin.
The Dr. Lisa Su-led company said third-quarter sales would be about $5.6B, compared to estimates of $6.71B. The company blamed the shortfall on a weaker-than-expected PC market and continued inventory corrections.
âThe PC market weakened significantly in the quarter,â said Dr. Su in a statement. âWhile our product portfolio remains very strong, macroeconomic conditions drove lower than expected PC demand and a significant inventory correction across the PC supply chain." 
Dr. Su added that AMD's (AMD) data center, embedded and gaming segments continued to show strength and the company's business model and balance sheet will help it navigate the downturn. 
Breaking it down by segment, client revenue fell 53% sequentially and 40% year-over-year to $1B, while data center revenue rose 8% sequentially and 45% year-over-year to $1.6B.
Gaming revenue was flat quarter-over-quarter and up 14% year-over-year to $1.6B, while revenue from its embedded segment was up 4% sequentially to $1.3B, largely thanks to its Xilinx acquisition which closed earlier this year.
The company also said it sees $160M worth of charges for items, including inventory and pricing. 
AMD (AMD) said GAAP gross margins during the period were 42% and adjusted gross margins were roughly 50%, below the 54% the company had guided to previously.
Santa Clara, California-based AMD (AMD) also said operating expenses during the period were $1.5B, below the prior outlook of $1.6B.
Nvidia (NVDA) and Intel (INTC), both of which compete with AMD (AMD), also slipped in extended-hours trading. 
On Wednesday, Wells Fargo cut estimates on Advanced Micro Devices (AMD) due to PC market weakness and emerging concerns in the data center business.
Preliminary data center revenue for the third-quarter is $1.6B, not $1.8B. Seeking Alpha regrets the error.