Exhale. There was no bottom-line disaster for semiconductor manufacturer
Advanced Micro Devices
. After the close of regular trading Wednesday, the company reported third-quarter earnings at the high end of Wall Street's expectations.
Excluding one-time gains and charges, AMD's income for the quarter ended Oct. 1 was 64 cents per share, compared with a loss of 36 cents a share in the year-ago period. Analysts polled by
First Call/Thomson Financial
, several of whom reduced their estimates after
earnings warning last month, were expecting the company to earn anywhere between 60 cents and 64 cents a share, with a mean estimate of 62 cents a share.
AMD reported revenue of just over $1.2 billion, generally in line with analysts' expectations.
The company's results were aided by a shift in product mix toward Athlon processors, which yield higher profit margins than the cheaper Duron and K6 chips, the latter of which AMD is phasing out.
Chairman and CEO Jerry Sanders told analysts on the company's conference call that Europe, the region Intel is blaming for its own sales slowdown, wasn't a factor. "Our business in Europe looked just fine in the third quarter," Sanders said. "The implication is that we must have gained market share." Sanders also blamed the recent turmoil in the semiconductor sector on "the misguided expectation that Intel could continue to grow at
its historical rate in the face of a competitor with a superior product."
The outlook for the fourth quarter was somewhat less than ebullient. AMD estimated that it would ship "between 8 and 9 million units," more moderate language than it used in July, when the company predicted unit shipments "could approach 9 million units" in the fourth quarter. AMD also said that fourth-quarter revenue growth could fall a bit below the 10% figure to which it had been guiding analysts, although it expected to meet expectations for sales growth in the second half of 2000 as a whole.
But AMD's results are probably good enough to comfort investors still smarting from a string of warnings in the PC and semiconductor industries. In addition to Intel, PC manufacturers
have told investors in recent weeks that sales and earnings would be lower than expected.
AMD was rallying in after-hours trading. The stock last traded at $24.44 on
, up from its New York close of $21.90.