NEW YORK (

TheStreet

) --

Advanced Micro Devices

(AMD) - Get Report

topped Wall Street's earnings expectations for its quarterly results on Tuesday, but came up a bit short on the top line.

The No. 2 chip maker posted a non-GAAP profit of $138 million, or 19 cents a share, in the three months ended Dec. 31 on revenue of $1.69 billion. The average estimate of analysts polled by

Thomson Reuters

was for earnings of 16 cents a share in the December-ended period on revenue of $1.72 billion.

The shares are down nearly 2% in late trades to $6.40 on volume of almost 450,000, according to

Nasdaq.com

.

Including items, such as $98 million in restructuring charges and $209 million asset impairment writedown, AMD lost $177 million, or 24 cents a share, in the latest quarter, down from its year-ago equivalent profit of $375 million, or 50 cents a share.

For its fiscal first quarter ending in March, the company said it expects a sequential revenue decline of 8%, plus or minus 3%, from its fourth-quarter total. That implies revenue of $1.55 billion for the first quarter, slightly below Wall Street's current consensus view of $1.59 billion.

AMD said it was able to grow gross margins by 1% on a sequential basis in the latest quarter to 46%, and highlighted the success of its low-power Brazos chip in the period.

"AMD shipped more than 30 million APU's in 2011, resulting in record annual notebook revenue," said Rory Read, the company's president and CEO, in a statement. "The unmatched combination of computing and graphics capabilities in our low-power 'Brazos' platform has made it our fastest ramping platform ever, paving the way for continued growth in key segments and geographies. Our server business has re-gained momentum, delivering two consecutive quarters of strong sequential growth."

The stock has enjoyed a flying start to 2012, running up more than 20%; although it's still down nearly 13% over the past year. Based on Tuesday's regular-session finish at $6.53, the shares are up 50% since scraping a 52-week low of $4.31 on Oct. 4.

Wall Street was mostly in wait-and-see mode ahead of the report with 23 of the 34 analysts covering the stock at either hold (17) or underperform (6), and valuation is an issue with the 12-month median target sitting at $6.

In its fiscal third quarter ended in September, AMD reported non-GAAP earnings of $110 million, or 15 cents a share, on revenue of $1.69 billion. That performance followed a warning by the company on Sept. 28 that it would miss its original revenue and gross margin guidance for the period because of manufacturing issues at a plant in Germany that limited supplies of its Llano chip and later-than-anticipated shipments of its next-generation server chip.

The fourth-quarter results follow news of a 10% across-the-board workforce reduction from the company on Nov. 3. At that time, AMD said it expected to record a charge of $101 million from the restructuring plan in the December quarter. The company also projected operating expenses of $610 million for the period, and said it expects the restructuring to be "substantially completed" by the end of the first quarter.

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Written by Michael Baron in New York.

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Michael Baron

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