SAN JOSE, Calif. – Advanced Micro Devices reported a slight decline in revenues for its third quarter and projected flat sales for the coming three months. The news comes two days after archrival Intel Corp. posted record revenues and projected sales would be up about three percent in the coming quarter.
AMD reported $1.62 billion in revenues and a $118 million loss for its third quarter. Sales were down two percent from the prior quarter, but up 16 percent from the same period last year.
The company's revenues were in line with revised Wall Street projections after AMD lowered its forecast in late September. The company narrowed its losses from $128 million in the same quarter last year. However, analysts had expected AMD's sales to edge up in the fourth quarter to $1.67 billion.
AMD reported microprocessor average selling prices (ASPs) decreased slightly sequentially and increased year-over-year. Intel said its ASPs have been and would continue to be flat.
Both companies noted a slowdown particularly in consumer markets.
Coming out of the second quarter, "PC OEMs worldwide and their supply chain…were planning for continued explosive growth for consumer PCs, [but] consumption dampened in Q3 we saw a reaction aimed at preventing inventory build up," said Dirk Meyer, chief executive of AMD. "We don’t think that process is complete, and it will continue going into Q4," he added in a call with financial analysts Thursday (Oct. 14).
Revenue in AMD's computing solutions segment was flat sequentially and up 13 percent year-over-year. The year-over-year increase was primarily driven by record notebook microprocessor unit shipments, the company said.
Intel reported quarter-to-quarter sales increases of about three percent for both its client and server groups.
Both companies are poised to roll out processors with integrated graphics in 2011. Specifically, AMD will release notebook and netbook integrated processors early next year for netbooks and low-end notebooks and desktops.
Some analysts expressed concerns the Apple iPad and emerging tablet market could reduce sales of netbooks and notebooks. "I personally think [there will be] some cannibalization of tablets on netbooks and notebooks, but tablets [sales will be] accretive overall" for the computer industry, Meyer said.
Intel chief executive Paul Otellini vowed Intel will win a place in the emerging tablet market. However Meyer said AMD will not immediately have any processors aimed at tablets that consumer a maximum of 2-3W.
"It doesn’t make sense for us to turn on R&D spending on the tablet market yet," said Meyer. "We'll invest R&D in it when it gets bigger," he said.
In the short term, AMD is poised to refresh its discrete graphics line up with a second-generation of parts capable of running Microsoft's Direct X 11 applications programming interface, Meyer said. "We will ship all the family members of the product line by the end of the quarter" potentially amounting to sales of several hundred thousand units, he said.
Archrival Nvidia recently released its first generation DX11 graphics processors. AMD's revenue for graphics processors was down about 13 percent sequentially in the quarter to $390 million.