Tech stock under pressure: Advanced Micro Devices, Inc. (NASDAQ: AMD)

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Advanced Micro Devices, Inc. (NASDAQ: AMD) stock fell over 2.4% on 30th October, 2019 (as of 10:07 am GMT-4; Source: Google finance) after the company posted mixed results for the third quarter of FY 19, though the company has delivered the highest quarterly sales in more than a decade. The company has reported third-quarter net income of $120 million as compared with $102 million in the year-ago period. The company has generated Cash, cash equivalents and marketable securities of $1.2 billion at the end of the third quarter.

AMD in the third quarter of FY 19 has reported the adjusted earnings per share of 18 cents, which is in line with the analysts’ estimates for the adjusted earnings per share of 18 cents, according to the analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 9 percent to $1.8 billion in the third quarter of FY 19, slightly missing the analysts’ estimates for revenue of $1.81 billion. The revenue grew due to higher revenue in the Computing and Graphics segment, which is partially offset by lower revenue in the Enterprise, Embedded and Semi-Custom segment. For the personal computer processors and graphics, AMD’s sales rose 36% year over year on the back of higher average selling prices of its newer products. The company’s gross margin has expanded 3 percentage points year-over-year and 2 percentage points quarter-over-quarter to 43 percent, mainly due to an increased RyzenTM and EPYCTM processor sales. AMD has delivered the Non-GAAP operating income of $240 million compared to $186 million a year ago and $111 million in the prior quarter. All Other operating loss was $54 million compared to $36 million a year ago and $52 million in the prior quarter. All Other operating loss was $54 million compared to $36 million a year ago and $52 million in the prior quarter.

Meanwhile, AMD is trying to take advantage of Intel’s delays in shifting production to more advanced technology. AMD now outsources manufacturing of its best chips to Taiwan Semiconductor Manufacturing Co., which analysts project it to be more than a year ahead of Intel in implementing new processes.

AMD expects fourth-quarter revenue to be in the range of $2.05 billion to $2.15 billion, while analysts on average have estimated revenue to be of $2.15 billion, according to FactSet. The year-over-year and sequential growth are expected to be on the back of an increase in Ryzen, EPYC and Radeon product sales. AMD expects non-GAAP gross margin to be approximately 44 percent in the fourth quarter of 2019.

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