Advanced Micro Devices (AMD) topped analysts' estimates in the third quarter and predicted a strong fourth quarter. After market close Wednesday, the chip vendor posted third quarter earnings of $219.3m, or 64 cents a share, on sales of $1.2bn. First Call consensus pegged the chipmaker for a profit of 62 cents a share in the quarter. AMD shares rose to 24 in afterhours activity on the Island electronic communications network, following the release of quarterly results. The stock closed off 94 cents to $21.81 ahead of the earnings report. The $1.2bn in sales nearly doubled the year-ago total when it lost $105.5m, or 36 cents a share, on sales of $662m. Despite a recent revenue warning from AMD's chief rival, Intel, the PC market remains strong, AMD executives said. Unlike Intel, AMD is not a major player in the corporate PC market, where several observers see a slowdown. "Our view is that business was pretty good," chief executive Jerry Sanders said, during an afternoon conference call with analysts. "In the consumer sector, business was pretty good, and they like AMD. ... We believe the PC market death is well-overstated." Sanders cited one survey that estimated AMD's PC processor market share at 17.5 percent at the end of the third quarter. The fourth quarter looks strong as well, Sanders said. "We think more of the concern in the marketplace has more to do with the Wall Street analysts' misguided expectation that Intel could continue to grow [at historical rates]," rather than a problem with the overall PC marketplace itself, Sanders said. "This looks like a regular Christmas. The Grinch isn't going to steal it." Flash memory demand also remains strong, executives said. Although Motorola recently told analysts to lower their expectations of wireless handset growth, demand on bits-per-unit basis continues to rise, AMD executives said. "More and more bits are being used in each solution, so even for a flat mean growth in the number of handsets, the number of bits being consumed is growing very very rapidly," Sanders said. AMD saw one snag during the third quarter with its low-end Duron chips. The company was forced to lower prices for that line to compensate for higher-than-expected prices for Duron-compatible integrated graphics chipsets, AMD said. The availability of Duron chipsets could hamper sales of that line in the fourth quarter as well, executives said. AMD still expects to meet its previously-stated goal of manufacturing 7.2 million seventh-generation chips, but the company might not sell that many because of the Duron chipset situation, Sanders said. The company posted third quarter net income, including a variety of one-time gains and charges, of $408.6m, or $1.18 a share. Company officials credited strong demand for its flagship Athlon processors as well as its popular flash-memory chips for the upside surprise. "Sales growth was led by continuing extraordinary demand for AMD flash memory devices, whose sales more than doubled over the same period of 1999 and grew by 17 percent sequentially on record unit sales," Sanders. "Demand for AMD flash memory products continues to exceed supply." Sales of its Athlon and flash-memory chips more than doubled from the year-ago quarter and improved ten percent from the second quarter. Looking ahead, AMD said it expects to sell out all of its Athlon processors in the fourth quarter. It expects sales of the Athlon, Duron and other PC processors to set new records in both units shipped and total sales in the quarter. For the year, it predicts it will sell more than 28 million units, up from 18.8 million units in fiscal 1999. Company officials said it will sell between 8 million to 9 million units in the quarter, representing about 20 percent of the 43 million to 45 million units expected to ship for the entire industry in the quarter. And flash-memory chip demand, it says, will continue to exceed supply for the foreseeable future. AMD said it sees total sales improving in the high-single-digit range in the fourth quarter, resulting in sales of around $4.8bn for the fiscal year. Last quarter, AMD easily hurdled analysts' estimates when it posted a profit of $207.1m, or $1.21 a share, on sales of $1.17 bn. Its shares moved up to a 52-week high of $48.50 in June after falling to a low of $8.19 last October. The stock split 2-for-1 in August. Ten of the 16 analysts following the stock maintain either a "buy" or "strong buy" recommendation. First Call consensus expects the company to earn $2.56 a share in the fiscal year. See ZDII for US tech investor news. See techTrader for more technology investment news, plus quotes and research. To have your say online click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.