AMD's Third Quarter Better Than Expected

| About: Advanced Micro (AMD)

AMD on Thursday delivered better-than-expected earnings and revenue for the third quarter as the results topped lowered estimates.

The chipmaker had warned that its third quarter sales would be lighter than projected on tepid consumer demand. Like Intel (NASDAQ:INTC), however, AMD’s quarter wasn’t as bad as feared.

AMD reported a third quarter net loss of $118 million, or 17 cents a share, on revenue of $1.62 billion, down 2 percent from the second quarter and up 16 percent from a year ago. Non-GAAP earnings were 15 cents a share. Wall Street was expecting a profit of 6 cents a share on revenue of $1.61 billion.

In a statement, AMD CEO Dirk Meyer said the company delivered solid gross margins of 46 percent that offset weak consumer demand. Later this quarter, AMD will ship its first Fusion Accelerated Processor Units.

As for the outlook, AMD projected flat fourth quarter revenue relative to the third quarter. Typically, the fourth quarter is seasonally strong.

By the numbers:

  • Computing solutions revenue was $1.23 billion on strong notebook demand. Operating income was $164 million.
  • Graphics processor revenue was $390 million with operating income of 1 million.
  • Average selling prices for AMD’s chips “decreased slightly” from the second quarter.
  • AMD’s employee count was 11,021 at the end of the third quarter, up from 10,649 at the end of the second quarter.
  • AMD ended the third quarter with cash and equivalents of $1.73 billion.

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