AMD has posted its third-quarter results, beating most analysts’ forecasts while reporting a six percent slump in PC chip sales at the same time.
AMD posted a net profit of $48 million, 6 cents EPS, which doesn’t sound like much but it is a lot better than the $157 million net loss reported a year ago. Revenue was up as well, $1.46 billion compared to $1.27 million last year. Furthermore, AMD announced its Q4 revenue should go up another 5 percent, ending north of $1.5 billion.
Gross margin slipped to 36 percent, which may point to stronger shipments of high-volume low-margin products like console parts. Processor ASP was flat sequentially, but decreased year-over-year. GPU revenue was down both sequentially and year-over-year, which is not surprising as the company is currently transitioning to new Rx200-series products.
However, it seems that the positive trends were already priced in, so AMD’s share tumbled 7 percent on the news, but it also gained 12 percent last week thanks to what appear to have been plenty of speculative moves.
In addition, there are some reasons to worry beyond the largely positive numbers. In the first months of 2013 AMD spent $133 million less on R&D than in the same period last year and its marketing/administrative spending also went down $125 million, but since there is no breakdown it is unclear whether AMD gutted its marketing budgets or pinched pennies in administration.
AMD is confident that its Q4 figures will be even better, but it’s not exactly rosy. AMD’s PC business fell 6 percent, while Intel gained 3.5 percent. This clearly has a lot to do with Haswell, but it also indicates that AMD’s core business is still losing market share to Intel. Although Haswell clearly hurt AMD, it should be noted that Bay Trail could do the same, if not worse, as it will go against AMD's low-end parts, which were traditionally the more competitive part of its lineup.