Updated from 8:24 a.m. EDT

Advanced Micro Devices

(AMD) - Get Report

delivered third-quarter sales a little short of Wall Street's expectations, though earnings were on target with consensus estimates and the company said it anticipates growth in fourth-quarter sales.

The stock fell 8 cents to $14.03 in early trading Friday.

The Sunnyvale, Calif.-based chipmaker posted sales of $1.24 billion, up 30% over last year's levels but down 2% from the prior quarter. The company cautioned in an update earlier this week that sales would be down on a sequential basis.

Analysts were expecting $1.29 billion in revenue for the quarter ended in Sept. 30.

The company swung to a profit of $43.8 million, compared with a year-ago loss of $31.2 million. Earnings were in line with expectations at 12 cents.

Profit was also up from the prior quarter's net income of $32.2 million.

Chief Financial Officer Robert Rivet said the bottom-line improvement was the result of a 21% quarterly increase in sales of microprocessors on higher prices and increased unit volumes. AMD's flash memory chips also saw improved gross profit margins, he added.

Processor sales, which accounted for 54% of total revenue in the quarter, totaled $672 million, up 21% from the prior quarter.

That's especially impressive given that

Intel

(INTC) - Get Report

, which draws the vast majority of its sales from microprocessors, has forecast total revenue growth of only about 4% to 5% (using the midpoint of its guidance range) for the same quarter.

AMD said sales of its increasingly popular 64-bit processors nearly doubled over the prior quarter, accounting for over one-third of revenue in its computer chip arm.

AMD's memory chips sales of $538 million were down 20% from the prior quarter. The chipmaker said in a release that flash sales into the cell phone market "declined significantly" and average selling prices were also down. But it's not the only chipmaker suffering from the flash slowdown: In September, rival Intel said it had pared back its own estimate of flash shipments for the same quarter.

AMD also said it expects overall sales to increase in the fourth quarter, aided by processor sales growth above normal seasonal levels. Flash memory sales should be flat to up.

Wall Street was looking for $1.4 billion in sales with earnings of 18 cents a share for the period.