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Advanced Micro Devices (AMD) Slides on Weak Earnings, Revenue Up 23%

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Advanced Micro Devices Inc. (AMD - Free Report) just released its third quarter fiscal 2016 financial results, with its earnings breaking even (accounting for non-stock based compensation and before non-recurring items) and revenue coming in at $1.307 billion. AMD is a Zacks Rank #2 (Buy), and is down about 2% to $6.82 per share in after-hours trading shortly after its earnings report was released.

Beat earnings estimates. The company broke even for earnings in Q3, surpassing the Zacks Consensus Estimate of a loss of 2 cents per share. This number excludes 50 cents from non-recurring items.

Beat revenue estimates. The company saw revenue figures of $1.307 billion, topping our consensus estimate of $1.204 billion and gaining 23% year-over-year. AMD can thank record semi-custom SoC and higher GPU and mobile APU sales, partially offset by client desktop processor and chipset sales, for its increase in revenue.

AMD’s Computing and Graphics segment revenue came in at $472 million, increasing 9% sequentially and 11% year-over-year. The sequential and year-over-year increases were driven primarily by increased sales of GPUs and offset by decreased sales of client desktop processors and chipsets. The year-over-year increase was also driven by increased sales of client mobile processors.

For Q4 2016, AMD forecasts a revenue decrease of 18% sequentially, give or take 3%.

“Our third quarter financial results highlight the progress we are making across our business,” said Lisa Su, AMD president and CEO. “We now expect to deliver higher 2016 annual revenue based on stronger demand for AMD semi-custom solutions and Polaris GPUs. This positions us well to accelerate our growth in 2017 as we introduce new high-performance computing and graphics products."

Here’s a graph that looks at AMD’s price, consensus, and EPS surprise:

ADV MICRO DEV Price, Consensus and EPS Surprise

ADV MICRO DEV Price, Consensus and EPS Surprise | ADV MICRO DEV Quote

Advanced Micro Devices, Inc. is a world-class company with the innovation, execution, and vision to grow our leadership position in the industry. Over the course of AMD's three decades in business, silicon and software have become the steel and plastic of the worldwide digital economy. Technology companies have become global pacesetters, making technical advances at a prodigious rate always driving the industry to deliver more and more, faster and faster. AMD's dedication to customer-centric innovation and competitive spirit is an unbroken thread running from our early days in the integrated circuit business, through an ever-broadening product portfolio.

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