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AMD meets reduced third-quarter forecast

Advanced Micro Devices Inc. on Thursday reported a third-quarter profit compared with a loss a year-earlier, but sales fell from the second quarter in line with the chipmaker's recently reduced outlook.
/ Source: Reuters

Computer chip maker Advanced Micro Devices Inc. Thursday posted a third-quarter profit compared with a loss a year earlier and predicted a fourth-quarter pickup in sales.

AMD shares rose 2 percent in after-hours trading following the announcement.

AMD, the chief rival to Intel Corp. in the market for personal computer microprocessors, earned $44 million, or 12 cents a share, in the quarter ended Sept. 26, compared with loss of $31 million, or 9 cents a share, a year earlier.

Sales in the period rose 30 percent from a year earlier to $1.24 billion. Sales were down 2 percent from the second quarter, as the company had recently forecast.

The Sunnyvale, California-based company said it expected total sales in the fourth quarter to rise from the third quarter, driven by sales of computer microprocessors that are expected to be better than usual for that period.

The company’s flash memory business, which was weaker-than-expected in the third quarter, will show flat-to-up sales in the fourth quarter, AMD said.

Eric Ross, an analyst with ThinkEquity Partners, said AMD may have trouble meeting its fourth-quarter targets, given fierce price competition for flash memory and the success of Intel’s lower-end Pentium 4 processors.

“I think they’re fooling themselves,” Ross said. “I’m having trouble believing these guys are gaining that much share against Intel to see an up quarter for PC processors.”