Chipmaker Advanced Micro Devices' quarterly revenue topped estimates but its forecast for the current quarter fell short as it struggles with falling PC sales and consumers' growing preferences for smartphones and tablets.
Like larger rival Intel, AMD is trying to refocus its business as sales of laptops languish and consumers increasingly depend on more mobile gadgets.
AMD's revenue forecast for the March quarter was gloomier than Intel's outlook last week.
In its report on Tuesday, AMD estimated revenue in the current first quarter would fall 9 percent from the fourth quarter, plus or minus 3 percentage points. The mid-point of AMD's revenue forecast is about $1.056 billion.
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 Corp'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.
AMD posted fourth-quarter revenue of $1.16 billion, compared to $1.69 billion in the year-ago quarter.
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 I/B/E/S.
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.
But 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.
AMD had a net loss of $473 million, or 63 cents a share, compared to a net loss of $177 million, or 24 cents a share, in the same quarter the year before.
Shares of AMD rose 2.04 percent in extended trade after closing down 0.41 percent at $2.45.
(Reporting by Noel Randewich; Editing by Phil Berlowitz)