Advanced Micro Devices Reports Profit Down 40%

SUNNYVALE, Calif. (AP) — Trouble in the global economy dragged the chip maker Advanced Micro Devices’ profit down 40 percent in the second quarter, and the company warned Thursday that revenue would continue to be hurt through the summer.

“Overall weakness in the global economy, softer consumer spending and lower channel demand for our desktop processors in China and Europe made the closing weeks of the quarter challenging,” Rory Read, the president and chief executive of A.M.D., said in a statement.

A.M.D. is the world’s No. 2 maker of microprocessors, behind Intel. Mr. Read warned that though the company was acting to improve its performance, he expected headwinds to continue in the third quarter. A.M.D., which makes about a fifth of the world’s computer processors, said its gross margin, a measure of profitability, was 45 percent in the second quarter, compared with 46 percent last year.

Early this month, A.M.D., which is based here, slashed its second-quarter revenue forecast, citing weaker-than-expected sales in China and Europe and lackluster consumer demand over all.

Some analysts said that the largest issue for the company, other than weak demand for personal computers, was that Intel became very competitive on prices in late May and June.

A.M.D.’s net income tumbled to $37 million, or 5 cents a share, from $61 million, or 8 cents, a year earlier. Excluding one-time charges and gains, the company earned 6 cents a share, missing analysts’ expectations by a penny, according to data provider FactSet.

Revenue fell 10 percent to $1.41 billion, in line with analysts’ revised expectations. A.M.D. said computing services revenue fell 13 percent because of lower desktop sales in China and Europe.

The company’s stock fell 61 percent Thursday to close at $4.86.

A.M.D. said it expected third-quarter revenue to fall 1 to 3 percent from the second quarter.