Advanced Micro Devices, Inc. (NASDAQ: AMD) fell sharply in Thursday trading. AMD reported upbeat earnings for its third quarter, while sales missed estimates. The company issued weak fourth-quarter sales guidance.
The company, out of Santa Clara, California, announced revenue for the third quarter of 2018 of $1.65 billion, operating income of $150 million, net income of $102 million and diluted earnings per share of $0.09. On a non-GAAP basis, operating income was $186 million, net income was $150 million and diluted earnings per share was $0.13.
Net income was $102 million compared to net income of $61 million a year ago and $116 million in the prior quarter. Diluted earnings per share proved to be $0.09, compared to diluted earnings per share of $0.06 a year ago and $0.11 in the prior quarter.
Gross margin grew to 40%, up four percentage points year-over-year, primarily driven by the ramp of new products, including RyzenTM and EPYCTM processors. On a sequential basis, gross margin was up three percentage points primarily driven by IP-related revenue and the ramp of new products. Excluding IP-related revenue and memory and inventory related adjustments, gross margin would have been two percentage points lower.
CEO Lisa Su said, "We delivered our fifth straight quarter of year-over-year revenue and net income growth driven largely by the accelerated adoption of our Ryzen, EPYC and datacenter graphics products. Looking forward, we believe we are well positioned for further market share gains as we continue making significant progress towards our long-term financial targets."
Shares tumbled $3.35, or 14.7%, to $19.44
