AMD Revenue Beats on Demand for Chips Used in Gaming Consoles

October 20, 2016, 9:17 PM UTC

Advanced Micro Devices

The Sunnyvale, Calif.-based chipmaker was hit hard in 2012, thanks to the rapidly-changing PC market which saw global shipments plunge as much as 8% one quarter. The cause: a saturated PC market and the ongoing transition to tablets as many consumers' go-to device. As a result, AMD saw earnings plunge 17% with a net loss of $1.18 billion. As part of a restructuring effort announced in the third quarter, AMD is simplifying product development and streamlining its supply chain. It will also focus on areas of opportunity, like the $67 billion global video game market, where its chips will provide the horsepower in Sony's upcoming PlayStation 4 console.
Photo: Ashley Pon/Bloomberg/Getty

Chipmaker Advanced Micro Devices reported a better-than-expected 23.2% increase in quarterly revenue, helped by higher demand for graphics chips used in gaming consoles.

AMD forecast revenue for the fourth quarter to decrease 18% from the third quarter, plus or minus 3%, which translates into a range of $1.03 billion-$1.11 billion.

Analysts on average were expecting revenue of $1.06 billion, according to Thomson Reuters I/B/E/S.

The company’s shares were down nearly 4% at $6.70 in after-hours trading.

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AMD (AMD) processors are being used in Microsoft’s (MSFT) Xbox One S, launched on Aug. 2, and Sony’s (SNE) PS4 Pro gaming consoles, expected to be launched on Nov. 10.

Net loss widened to $406 million, or 50 cents per share, in the third quarter ended Sept. 24 from $197 million, or 25 cents per share, a year earlier.

The company’s revenue rose to $1.31 billion from $1.06 billion, above the average analyst estimate of $1.21 billion.

Excluding items, the company earned 3 cents per share, while analysts had expected break-even per share.

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