Advanced Micro Devices (NYSE: AMD) -- a major name in the chip sector and the leading rival of the 800-pound Intel (NASDAQ: INTC) gorilla -- slinked into the earnings confessional Thursday to report third-quarter losses that were broader than expected. Specifically, the firm posted a net loss of $396 million, or 71 cents per share.. In its year-ago period, AMD banked a per-share profit of 27 cents per share, equal to net income of $136 million.

What's more, the loss was 9 cents wider than the 62-cent loss projected on Wall Street. While earnings excluding items were not reported, AMD did note that many analysts' estimates failed to account for the $120 million -- 22 cents per share -- in costs that the company swallowed relating to its $5.6 billion acquisition of ATI Technologies. So when this is taken into account, the picture isn't quite as bad.Another silver lining was AMD's sales figure of $1.63 billion, a 23% increase over last year and above analysts' consensus view of $1.52 billion. Microprocessors sold well during the period, as did the company's new Optetron server chip, which hit shelves in September. As PC demand builds on a global scale, demand for microprocessors will also increase.

Looking forward, AMD says it expects higher fourth-quarter revenue as it aims to keep nipping at the heels of its larger Pentium-parenting rival.

In after-hours trading, AMD shares have gained a fraction. The stock rose more than 3% in regular-session trading today, stretching close to a three-month high.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.