Advanced Micro Devices (AMD) on Wednesday reported a large loss in the third quarter despite having sold the same number of PC processors as in the preceding quarter.
For the quarter ended Sept. 30, AMD reported revenue of US$765.8 million, a 37 percent drop from revenue of $1.2 billion during the third quarter of last year, AMD said in a statement. AMD reported a pro forma net loss of $97.4 million, or $0.28 per share, compared to earnings of $0.70 per share during the year-earlier quarter, the company said. That figure matched the expectations of analysts surveyed by Thomson Financial/First Call.
AMD's consolidated net loss was $186.9 million, or $0.54 per share, the company said. This compares to a profit of $408.6 million or $1.38 per share, during the same quarter last year.
Those numbers came despite sales of more than 7.7 million processors during the quarter, matching the number sold in the second quarter of this year, which marked a volume record for the company.
However, AMD's results shouldn't come as too much of a shock. Earlier this month, the company tried to avoid surprise by warning that the average selling price (ASP) of processors had dropped more than it had expected.
AMD also saw the beginning of a rebound in its flash memory division in the quarter, said Hector Ruiz, AMD's chief operating officer, in a conference call with press and analysts following the results. "We expect to see modest revenue growth in the fourth quarter," he said. Most of the demand for flash is expected to be driven by demand stemming from new consumer devices, offsetting the weakness from the communication sector, Ruiz said.
Despite a very weak quarter, the company still has a rosy outlook for the final quarter of the year. "We are on track to meet our goal of a 50 percent market share in U.S. retail mobile PC sales by year end," Jerry Sanders, AMD's chief executive officer said on the call. Sanders also expressed satisfaction with AMD's current total PC processor market share. "We think that maintaining market share in the 22 percent range in an extremely weak market . . . is a noteworthy achievement," he said. In AMD's worst-case estimate, AMD lost a fraction of one percent of the processor market in the quarter, Sanders estimated.