Advanced Micro Devices (NYSE:AMD) closed the regular trading session on Thursday flat, at $4.09 per share, and fell as much as 8 percent in post-market trading despite reporting third-quarter financial results that came in ahead of expectations. Revenue increased 15 percent on the year to $1.46 billion, beating the average analyst estimate of $1.42 billion. Adjusted earnings per share increased from a loss of 21 cents in the year-ago period to a gain of 4 cents per share, beating the average analyst estimate of 2 cents per share.
Earlier this week, Wedbush Securities upgraded AMD to Outperform from Neutral on its positive long-term outlook. Wedbush believes that AMD stands to profit from the increased popularity of gaming consoles, and the firm increased its price target on the stock to $5 from $4.50, well above the mean analyst price target of $4.30.
The technology company has, in fact, received a fair share of positive investor attention over the past several months — shares are up about 25 percent from September 1 — thanks in large part to a battery of appealing product launches.
AMD’s post-market slide appears to be the result of a less-than-exciting fourth-quarter revenue forecast of plus 5 percent sequentially (plus or minus 3 percent.) That would put fourth-quarter revenues at about $1.5 billion, marginally below the current average analyst estimate of $1.51 billion.
Shares advanced nearly 9 percent over the past five day period in anticipation of the earnings, and the fourth-quarter forecast does not appear to support the bullish run.