Advanced Micro Devices' quarterly revenue forecast on Tuesday did not meet expectations, and the chipmaker's CEO warned of more choppiness in the PC market as smartphones and tablets gain traction with consumers.
Still, AMD shares rose 1.2 percent in extended trading after the company's fourth-quarter results beat expectations.
While the Sunnyvale company's results for the quarter ended in December topped expectations, its revenue forecast for the March quarter was gloomier than Intel's outlook last week.
"As I look at the PC market, that market's going to continue to be choppy in 2013," CEO Rory Read told analysts on a conference call.
"If I look at the overall year -- weaker in the first half, stronger in the second half. Probably a net flat to slightly down," he said.
AMD estimated revenue in the current first quarter would fall 9 percent from the fourth quarter, plus or minus 3 percentage points.
Last Thursday, Intel said revenue for its March quarter would fall about 6 percent from the prior quarter and disappointed Wall Street with a sharp increase in capital spending.
"They (AMD) guided down 9 percent at midpoint, compared to Intel down 6 percent. That really reflects a weaker competitive position out there," said Evercore Partners analyst Patrick Wang.
Microsoft's long-awaited launch of Windows 8 in October brought touch-screen features to laptops but failed to spark a resurgence in sales that AMD, Intel and many PC manufacturers had hoped for.
"We do think Windows 8 is a very important event in the industry and we think that impact will build over the course of the year," Read said.
On the conference call, Read focused on AMD's previously announced plan to diversify into new markets and said that measures to cut costs were on track.
AMD posted fourth-quarter revenue of $1.16 billion, compared with $1.69 billion in the year-ago quarter. The mid-point of AMD's revenue forecast for the March quarter is about $1.056 billion.
Analysts had expected $1.149 billion in revenue for the December quarter and $1.108 billion in revenue for the current quarter, according to Thomson Reuters.
AMD and Intel were both caught flat-footed in recent years with the emergence and fast growth of mobile devices, which led to an unexpected slump in the PC industry.
While Intel has deep pockets to fund research on new processors to catch up in tablets and smartphones, AMD faces declining cash flows and a more modest balance sheet.
One of Silicon Valley's oldest chipmakers, AMD is trying to find new markets for its chip technology, including communications, microservers, digital signs and stripped down "thin client" computers.
AMD had a net loss of $473 million, or 63 cents a share, compared with a net loss of $177 million, or 24 cents a share, in the same quarter the previous year.
Its adjusted loss per share was 14 cents, beating expectations for a 20-cent loss.
Shares of AMD rose 1.22 percent in extended trade after closing down 0.41 percent at $2.45.