When Advanced Micro Devices Inc. (NYSE: AMD) reported third-quarter results after markets closed on Thursday, shares fell more than 5% in after-hours trading. Changes to some analysts’ ratings on the stock appear to have turned that loss around. The stock was trading about 4% higher shortly after Friday’s opening bell.

The big news from AMD on Thursday was that it will fire 7% of its workforce (about 700 people) and get rid of some of its real estate as the company tries to improve its profits and its prospects for long-term growth. Pacific Crest liked what the company is doing, particularly the recent change at the top that saw the firm name Dr. Lisa Su as its new CEO to replace Rory Read. The investment company thinks that the new management can perform better than consensus estimates indicate.

That belief is not universal. Canaccord Genuity cut its rating on the stock from Buy to Hold with a price target cut from $4.50 to $2.75 per share. The investment firm does not believe that the restructuring is finished at AMD and is particularly cool toward the announced cut to revenue guidance.

AMD said it expects fourth quarter revenues to fall by 13% (+/-3%) sequentially. Analysts were expecting $1.48 billion for the fourth quarter and a sequential drop of 13% leaves revenues at about $1.24 billion. An analyst at Sanford C. Bernstein characterized the new forecast as “horrendous.”

AMD said last night that it will take a $57 million charge in the fourth quarter related to severance for the fired employees and a further $13 million charge in the first quarter of 2015 primarily related to reducing its real estate holdings. AMD expects operational savings of $9 million in the fourth quarter and $85 million in the 2015 fiscal year. That nets out to about $20 million in savings through the end of next year.

Perhaps Friday’s share price run-up is based more on Intel Corp.’s (NASDAQ: INTC) earnings report from earlier this week, in which the chip maker said growth in its PC business rose 9% and notebook chip shipments jumped 21%.

AMD’s computing and graphics chip sales were down 16% year-over-year in the third quarter. Revenue in the company’s video game systems and server group rose 21%.

Shares were up about 4.8% in the first half hour of trading on Friday, at $2.75 in a 52-week range of $2.54 to $4.80.

ALSO READ: Intel Gets Cold Shoulder on Good Earnings as the Market Flush Takes Place

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.