AMD posts 3Q loss despite rising sales

Advanced Micro Devices Inc.'s losses were deeper than analysts feared in the third quarter, but the slumping chip maker said stronger sales of microprocessors and improving cost controls are now helping lift the company out of its financial doldrums.

The Sunnyvale-based company said Thursday its net losses were $396 million, or 71 cents per share, during the three months ending in September. That compares with a profit of $136 million, or 27 cents per share, in the year-ago period.

The latest loss was 9 cents greater than the loss of 62 cents per share that analysts surveyed by Thomson Financial were expecting.

AMD, the world's No. 2 maker of microprocessors, behind much-larger Intel Corp., does not provide profit figures that exclude all one-time charges, a common measurement used by Wall Street to gauge a company's profitability. Generally accepted accounting principles do not include stripping out costs for such nonrecurring expenses as acquisitions and employee stock compensation.

However, AMD said many analysts already excluded from their estimates the $120 million, or 22 cents a share, in costs that the company incurred during the period for charges related to its $5.6 billion acquisition of graphics chip maker ATI Technologies Inc. and other activities.

On that basis, AMD said it lost less money than Wall Street predicted.

The company's $1.63 billion in sales reflected a 23 percent increase over last year, easily surpassing the average analyst estimate of $1.52 billion.

AMD's revenues were bolstered by higher microprocessor sales and the first shipments for revenue of its new Opteron brand server chip, which launched in September and is a critical weapon in its fight with Intel for market share.

Hearty PC demand around the world is driving up the need for the microprocessors that act as the brains of those computers, helping strengthen both AMD and Intel.

On Tuesday, Intel reported a 43 percent jump in third-quarter profits on soaring sales that hit $10.09 billion during the period.

Both companies sought to soothe analysts' fears about a possible slowdown in chip orders during the holiday season resulting from computer makers overestimating their needs. But Intel and AMD management said demand remains strong and the companies aren't seeing any sluggishness.

Intel offered an upbeat financial forecast, and AMD said it expects higher fourth-quarter revenue.

AMD shares finished regular-session trading up 44 cents, or 3 percent, at $14.55. In after-hours trading, the stock rose another 20 cents to $14.75.