AMD Says Profits, Revenue Down, But Outlook Improving

While year-over-year results were down, the beleaguered chip vendor said demand is strong and revenue is getting better.
Advanced Micro Devices on Thursday reported a narrower loss in the third quarter year-over-year, beating analyst estimates. Revenues were down to $1.4 billion, from $1.8 billion a year ago.

The chip maker reported a net loss of $128 million, or 18 cents a share, compared to $134 million, or 22 cents a share, the same period last year.

Nevertheless, AMD beat Wall Street estimates. Analysts polled by Thomson Financial expected revenues of $1.26 billion and a loss of 42 cents a share.

AMD attributed the higher-than-expected results to "strong demand" for its microprocessors and graphics chips that power PCs. "Growth in microprocessor and graphics unit shipments drove an 18% sequential (from the second quarter) revenue increase, while improved factory utilization rates, higher microprocessor average selling price and an increase in 45nm (nanometer) product shipments resulted in a gross margin improvement from the prior quarter," Dirk Meyer, AMD president and chief executive, said in a statement.

Compared to the second quarter, gross margin rose to 42% from 37%.

AMD rival Intel also beat analyst estimates in the third quarter, another indication of a strengthening PC market. Intel this week reported that net income fell 8% to $1.9 billion, or 33 cents a share, on revenues of $9.4 billion. Wall Street had expected income of 28 cents a share on revenue of $9 billion.

AMD's and Intel's results backed findings from analyst firms Gartner and IDC, which reported Wednesday that global PC shipments in the third quarter grew 0.5% and 2% year-on-year, respectively. It was the first year-on-year quarterly increase this year.

AMD did not make a specific forecast for the fourth quarter, saying only that it expected revenue to be "up modestly."

InformationWeek has published an in-depth report on managing risk. Download the report here (registration required).

Editor's Choice
James M. Connolly, Contributing Editor and Writer
Carrie Pallardy, Contributing Reporter
Roger Burkhardt, Capital Markets Chief Technology Officer, Broadridge Financial Solutions
Shane Snider, Senior Writer, InformationWeek
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
John Edwards, Technology Journalist & Author