AMD: PC Sales for Fourth Quarter to Improve

By Reuters  |  Print this article Print

While PC sales are likely to improve in the fourth quarter, according to AMD, the company won't feel the effects of the boost until the PC makers burn through excess component inventory.

SAN FRANCISCO, Oct 14 (Reuters) - Consumers will likely buy more PCs in the fourth quarter but manufacturers will continue to use up components they had over-accumulated in recent months, chipmaker Advanced Micro Devices Inc (NYSE:AMD) said on Thursday.

Two days after Intel's (NASDAQ:INTC) better-than-expected earnings lifted hopes for technology companies, which have been hurt by weak consumer demand and high inventories, AMD said its overall sales would be about flat in the December quarter.

"I think we saw a reaction across the supply chain aimed at bringing down or preventing an inventory build," said AMD Chief Executive Dirk Meyer. "We don't think that process is complete as of the end of Q3 and in fact will continue going into Q4."

Meyer said that even though tablets like Apple's (NASDAQ:AAPL) iPad are eating into demand for laptops, AMD will hold off on investing to develop microprocessors for that market until it grows more.

"Frankly we're still so small in the notebook market that given all of the opportunities in front of us it doesn't make sense for us to start turning R&D dollar spending towards the tablet market yet," he said.

Sunnyvale, California-based AMD's third-quarter non-GAAP net profit was $108 million, or 15 cents a share, much higher than the 6 cents per share that analysts on average expected, according to Thomson Reuters I/B/E/S.

Shares of AMD, which last year hived off its chip manufacturing plants, or fabs, to focus on chip design, rose 4.8 percent in after-hours trade after closing 1.11 percent lower at $7.14.