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AMD swings to quarterly loss as sales drop 26%

Published: 13:56 16 Oct 2015 BST

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AMD anticipates weaker revenue in the current quarter.

Advanced Micro Devices (NASDAQ:AMD), a chip maker, swung to a fiscal third-quarter loss as revenue fell amid a shrinking market for personal computers. 

Net loss was $197mln, or $0.25 loss per share, in three months ended September 26, compared to a year-earlier profit of $17mln, or $0.02 per share.

On an adjusted basis, the loss was $0.17 per share, wider than the $0.12 loss predicted by analysts polled by Capital IQ.

Third-quarter revenue fell 26% to $1.06bn, but surpassed the Wall Street consensus of  $995.9mln.

AMD said revenue in its computing and graphics segment was off 46% from the year-earlier quarter.

"Overall, PC demand, particularly in the consumer market, continues to be somewhat muted," Reuters cited Chief Executive Officer Lisa Su as saying on a call with analysts.

PC shipments weakened 7.7% worldwide in the third quarter as the rising dollar made them costlier.

Looking ahead, AMD said it expects revenue to decrease 10% in the fiscal fourth quarter from the third quarter compared with analyst estimates of a 6% drop.

Shares fluctuated in early trading on Friday and were last up 1.5% at $2.00 as of 8:54 a.m. in New York. The stock had lost 26% this year through the close of trading on Thursday.

Separately, the Sunnyvale, California-based company unveiled late on Thursday a deal with a Chinese company that will provide a $371mln cash infusion and cut future costs.

Under the deal, Nantong Fujitsu Microelectronics will purchase an 85% stake in those operations and AMD will retain the remainder.

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