Like Intel (Nasdaq: INTC) before it, Advanced Micro Devices (NYSE: AMD) reported a soft consumer market in the third quarter, but pretty strong business overall. Unlike Intel, AMD is on the verge of pushing out brand-new products in several operating segments, which makes me inclined to forgive its modest inventory buildup.

AMD's revenue came in at $1.62 billion, a 2% sequential drop that lands in the upper half of updated guidance. On the bottom line, non-GAAP earnings exploded from breakeven a year ago, and $0.11 per share last quarter, to $0.15 per share this time around. That would have been a positive surprise before everyone lowered their targets on AMD's revenue warning. Even in a bleak environment, AMD is finally a dependable profit-maker again after a few years in the poorhouse.

One quick accounting note: Like most of my colleagues, I tend to prefer GAAP numbers over the more malleable and manipulation-prone non-GAAP figures. In this case, the negative contributions from a couple of decidedly non-core items made a big difference, and I think it's more fair to consider AMD's operations without them:

  • Early payment fees on a bushel of refinanced debt added up to $24 million.
  • The Globalfoundries chip manufacturing arm, which has been spun off to deep-pocketed investors and now aims to take on market leader Taiwan Semiconductor Manufacturing (NYSE: TSM) on its own, inflicted a $186 million non-cash charge on AMD.

The company is considering the "appropriateness" of its current equity method of accounting for Globalfoundries, and I wouldn't be shocked to see a change in coming quarters. I'm happy to treat Globalfoundries as a "discontinued operation" for all intents and purposes.

AMD is gearing up to release a new graphics lineup next week, and the first Fusion products later in the quarter. There's some debate about whether NVIDIA (Nasdaq: NVDA) is taking market share from AMD in the graphics market, but next week's launch should settle that score for a while.

Analyst opinions on AMD range from a low target price of $5 to $13 per share, including the $12 target set by Gleacher analyst Doug Freedman, who justifies that lofty valuation with predictions of a banner year for the company in 2011. Me, I'm sticking to my $10 price estimate, which still makes the stock a cheap buy today. What we just saw is pretty close to what I expected out of AMD's third quarter.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. Intel is a Motley Fool Inside Value pick. NVIDIA is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.