NEW YORK (TheStreet) -- Advanced Micro Devices (AMD) shares continued to fall 4.7% to $3.37 as of 1:25 p.m. EDT, adding to last week's post-earnings losses. Though revenue and earnings beat estimates, the semiconductor specialist's exposure to the low-end consumer computing segment provoked concerns of vulnerability to existing weakness in PC demand.
AMD reported third-quarter net income of $48 million, or 6 cents a share, on revenue 15% higher than a year earlier to $1.46 billion. The company forecast that fourth-quarter revenue will increase between 2% and 8% sequentially.
Though earnings per share beat Thomson Reuters' estimations of 2 cents a share, sales in its computer processing units division disappointed investors, leading to a 13.7% drop in share price on Friday. Sales in the division dropped 15% compared to a year earlier, due to soft PC demand.
During a conference call, President and CEO Rory Read said he anticipates PC shipments to decrease 10% in both 2013 and 2014 and the company is making adjustments to hedge declines.
"Two years ago, 90-95% of our business centered on PCs and we've launched the clear strategy to diversify our portfolio," said Read. "If you look at the results in the third quarter, we are already seeing the benefits of that opportunity with over 30% of our revenue now coming from semi-custom and our embedded businesses."
After reviewing third-quarter results, UBS maintained its "neutral" rating on the chipmaker but revised its price target to $4.10 from $4.50 on weakness in AMD's core PC-related divisions.
Credit Suisse remained bearish on the stock with a price target of $3 and an "underperform" rating. "While we anticipate another profitable quarter in December, sustainability and magnitude of profits in CY14 are still a question mark," Credit Suisse wrote in its report.