Advanced Micro Devices, Inc. (NYSE:AMD) investors have filed a class action lawsuit against the company. Investors have accused the Sunnyvale, California-based company of making “false and misleading” statements about its Llano chip. The lawsuit has been filed by Robbins Geller Rudman & Dowd LLP, and represents Advanced Micro Devices, Inc. (NYSE:AMD) investors between October 27, 2011 and October 18, 2012.
Advanced Micro Devices investors lost plenty of money
The suit claims that Advanced Micro Devices, Inc. (NYSE:AMD) overestimated the sales prospects of its Llano processor, especially in emerging markets. Investors have alleged that the company “either knew or ignored” the steep misalignment between Llano motherboard sales and its estimated processor sales. Advanced Micro Devices, Inc. (NYSE:AMD) said (falsely) that its desktop business was well positioned and would continue to grow in 2012.
On April 19, 2012, the company stated that the Llano APU demand was better than expected, especially in emerging countries. And it didn’t see any significant issues in the desktop market. But the reality was dramatically different. In July 2012, Advanced Micro Devices, Inc. (NYSE:AMD) reported weak results for the quarter ending June 30, 2012. That was mainly due to pathetic demand for Llano APUs. That prompted a 25% decline in the stock. Investors lost plenty of money at the time.
A few weeks later, Advanced Micro Devices, Inc. (NYSE:AMD) said its profit margins for Q3, 2012 were expected to decline 31% QoQ as the company wrote down about $100 million in inventory charges. The stock tanked another 17%. Advanced Micro Devices, Inc. (NYSE:AMD) said that it’s aware of the lawsuit, and is confident that its statement and actions were in line with securities laws.
Advanced Micro Devices Q4 estimates
The company will be reporting its Q4 earnings today after the bell. Analysts expect Advanced Micro Devices, Inc. (NYSE:AMD)’s earnings to come at 6 cents per share. Its revenue is expected to jump 33% YoY to $1.54 billion. The release of Xbox One and PlayStation 4 should help the company post better figures despite a challenging PC environment. Wedbush as an Outperform rating on the stock with a $5 price target.
Advanced Micro Devices, Inc. (NYSE:AMD) shares surged 2.75% to $4.30 at 9:51 AM EST.
