Advanced Micro Devices Inc. (AMD), the world's second-largest microprocessor maker, Tuesday posted net profit above Wall Street's expectations, fueled by strong demand for its computer chips.

Net income for the third quarter ended Sept. 25 rose to $76 million, or 18 cents per share, from $43.9 million, or 12 cents per share, a year earlier, topping analysts' average estimate of 8 cents per share, according to Reuters Estimates.

Shares were up slightly in after-hours trade.

"Results look to be strong across the board, whether in servers, notebooks or desktops," Cody Acree, an analyst with Legg Mason, said hat has typically been reluctant to forecast future business. "It speaks to some degree of confidence on the company's part," Acree said.

AMD has had a hit with its Opteron chips for business computers, and AMD's stock has traded at 37 times its fiscal 2006 expected earnings, according to Reuters Estimates, compared with 15 for AMD's bigger competitor, Intel Corp. (INTC), which is the world's biggest chip maker.

Net sales rose 23 percent to $1.52 billion from $1.24 billion. Analysts were looking for revenue, on average, of $1.38 billion. Estimates ranged from $1.33 billion to $1.50 billion, according to Reuters Estimates.

"Good numbers were to some degree baked into the stock," said Kevin Rottinghaus, an analyst at FTN Midwest Securities Corp. in Cleveland who has a "buy" rating on the shares. "I'm not expecting any big move" in the shares.

AMD said it expects fourth-quarter microprocessor sales to grow between 7 percent and 13 percent from the third quarter, and by 42 percent to 50 percent from the year-ago fourth quarter.

AMD's flash memory business, which supplies chips for cellular telephones, networking equipment and other electronic products, has been a drag on earnings because of falling prices.

Quarterly losses in flash memory declined by nearly half to $50 million from $90 million in the second quarter and are "definitely moving in the right direction," Acree said.

Of 33 analysts who rate the stock, 18 have "holds," nine have some form of "buy" rating and the rest recommend selling, according to Reuters Estimates.

AMD's stock rose 11 cents, or 0.5 percent, to $23.40 in after-hours trade on the Inet electronic brokerage after closing at $23.29 on the New York Stock Exchange (search).