Earnings Results: AMD reports highest revenue in more than a decade, but slightly light forecast makes stock volatile

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Advanced Micro Devices Inc. reported its highest quarterly sales in more than a decade Tuesday, but a forecast that came in slightly below expectations sent shares on a see-saw in late trading.

AMD AMD, -1.96%  reported third-quarter net income of $120 million, or 11 cents a share, compared with $102 million, or 9 cents a share, in the year-ago period. Adjusted earnings were 18 cents a share. Revenue rose to $1.8 billion from $1.65 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast adjusted earnings of 18 cents a share on revenue of $1.81 billion.

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“Our first full quarter of 7nm Ryzen, Radeon and EPYC processor sales drove our highest quarterly revenue since 2005, our highest quarterly gross margin since 2012 and a significant increase in net income year-over-year,” said Lisa Su, AMD president and chief executive, in a statement.

In chip parlance, nanometers, or nm, refers to the size of the transistors that go on a computer chip, with the general rule being that smaller transistors are faster and more efficient in using power.

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AMD expects fourth-quarter revenue of $2.05 billion to $2.15 billion, while analysts on average had forecast revenue of $2.15 billion, according to FactSet.

Shares were volatile in the extended session Tuesday, rising 3% before falling 1.6% in the extended session. The stock closed with a 2% decline in the regular session at $33.03. In comparison, the S&P 500 index SPX, -0.08%  closed down 0.1%, the tech-heavy Nasdaq Composite Index COMP, -0.59% declined 0.6%, and the PHLX Semiconductor Index SOX, -0.90%  fell 0.9% Tuesday.

AMD’s report follows Intel Corp.’s INTC, -0.74%, where shares rallied after the larger chip maker gave an optimistic forecast, and gains in shares of NXP Semiconductors NV NXPI, +5.30% which also reported strong results. On the other hand, results from chip makers Texas Instruments Inc. TXN, +0.24%  and Xilinx Inc. XLNX, -2.55%,  which were not as optimistic.

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