(Updates with closing share price in fifth paragraph.)
Oct. 28 (Bloomberg) -- Advanced Micro Devices Inc. rose after the second-largest maker of chips for personal computers forecast sales that may top some analysts’ estimates, citing laptop demand in emerging markets.
Revenue in the current period will increase as much as 5 percent from the third quarter, Sunnyvale, California-based AMD said in a statement yesterday. That indicates sales as high as $1.77 billion. Analysts on average had projected $1.71 billion, according to Bloomberg data.
AMD’s new Fusion product line, which combines the functions of processors and graphics chips, helped the company gain laptop market share, particularly in developing countries such as China and India, Chief Executive Officer Rory Read said on a conference call. That helped alleviate the impact of a shortfall in chip supply caused by production glitches at Globalfoundries Inc., an AMD spinoff that makes most of the company’s chips.
“We took share” in laptop PCs, Read said yesterday. In manufacturing, “we are already seeing steady improvements. But we are not out of the woods yet.”
AMD shares advanced 7.2 percent to $5.94 at the close in New York, the highest level since Sept. 28. The stock had declined 32 percent this year before today.
The company’s bullish forecast echoed that of larger rival Intel Corp., which last week reported stronger-than-estimated third-quarter sales and fourth-quarter projections, buoyed by laptop PC demand in markets outside the U.S. and Europe.
AMD’s third-quarter net income was $97 million, or 13 cents a share, compared with a loss of $118 million, or 17 cents, a year earlier. Analysts had predicted profit of 9 cents, the average of estimates compiled by Bloomberg.
Sales were $1.69 billion, 4.4 percent higher than a year earlier and up 7.4 percent from the prior period, AMD said. The company had predicted a revenue increase of 10 percent from the second quarter before discovering the production problems. Analysts on average had projected $1.65 billion in sales.
“They were able to beat their conservative expectations,” said Suji De Silva, an analyst at ThinkEquity LLC in San Francisco. “Now we’re seeing the actual ability to get product out of Globalfoundries.”
The company said it expects fourth-quarter revenue to increase 3 percent, plus or minus 2 percent, from the previous three months.
Yesterday’s earnings report is AMD’s first under Read, a former Lenovo Group Ltd. and International Business Machines Corp. executive. Read was appointed in August, after a search following the ouster of Dirk Meyer in January.
--Editors: Jillian Ward, Nick Turner
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