SAN FRANCISCO -- Advanced Micro Devices ( AMD) reported a narrower-than-expected loss in the third quarter, as the company's computer chip shipments jumped. The surprising strength in AMD's business cheered investors, even as the company added its voice to the growing chorus of tech firms warning that demand is lagging in the final quarter of the year. Shares of AMD were up about 10% at $4.53 in extended trading Thursday. AMD said revenue in its graphics processor and microprocessor businesses both increased during the third quarter, contributing to $1.78 billion in sales for the three months ended Sept. 27, compared to $1.63 billion at this time last year. While the results included of $191 million from a licensing deal, AMD managed to beat the $1.48 billion in sales expected by Wall Street analysts even excluding the licensing benefit. For AMD, which has stumbled through one problem after another during the past year, the third-quarter results represented some much-needed good news. CEO Dirk Meyer -- who replaced Hector Ruiz at the top post in July -- characterized the third quarter as "directionally correct." "We're on the path to becoming the company we aspire to be, and we will be," Meyer said, while noting that he was still not satisfied with the company's performance. AMD chalked up its eighth consecutive quarter of red ink in the third quarter. But the loss of $67 million, or 11 cents a share, was significantly lower than the $396 million, or 71 cents a share, loss that the company reported at this time last year. Analysts polled by Thomson Reuters were expecting a loss of 40 cents.