AMD has posted impressive results for Q3 2013 beating Wall Street estimates; however, the company's shares dropped due to its future outlook.
Founded in 1969, AMD is the only significant rival to Intel in the central processing unit (CPU) market for personal computers (x86 based). The company's main products include microprocessors, motherboard chipsets, embedded processors and graphics processors for servers, workstations and personal computers, and embedded systems applications.
AMD is the second-largest global supplier of microprocessors and also one of the largest suppliers of graphics processing units (GPU).
"AMD returned to profitability and generated free cash flow in the third quarter as we continued to successfully execute the strategic transformation plan we outlined a year ago," said Rory Read, AMD president and CEO. "We achieved 26 percent sequential revenue growth driven by our semi-custom business and remain committed to generating approximately 50 percent of revenue from high-growth markets over the next two years. Developing industry-leading technology remains at our core, and we are in the middle of a multi-year journey to redefine AMD as a leader across a more diverse set of growth markets."
The company reported a net income of $48 million in the quarter ending September 30, or 6 cents a share, compared to a loss in Q3 2012. AMD confirmed that its sales rose 15 percent, which is the first quarterly increase from a year earlier since 2011. Excluding certain costs, the company had profit of 4 cents per share, while analysts predicted a profit of just 2 cents per share on sales of $1.42 billion.
Worldwide PC shipments fell 8.6 percent in Q3 2013, which is the sixth consecutive drop. AMD's computing-solutions business also declined by 15 percent with sales of $790 million in Q3 2013.
However, AMD's outlook for the final quarter of 2013 may not seem promising for analysts. The company announced that revenue for Q4 2013 will rise by 5 percent, plus or minus 3 percentage points, which indicates sales of $1.49 billion, while analysts estimated sales of $1.52 billion.
The company's shares dropped by 8.3 percent on Thursday to $3.75 in extended trading following the earnings call for Q3 2013.
