AMD Reports 4Q Earnings; (170)M - Wall Street is Pleased - CPUs

Update: Taking ATI out of the equation, AMD loses only 170M, and Wall Street is very pleased with the news as the stock jumps up over 10%.

Update: 4Q earnings will be announced Thursday (17/01/2008) after the market closes.

http://money.cnn.com/news/newsfeed [...] 000421.htm

Quote :

Big Losses Projected At Struggling AMD

January 11, 2008: 04:25 AM EST

SAN FRANCISCO (Dow Jones) -- Advanced Micro Devices Inc. will report fourth- quarter results next week with Wall Street projecting bigger losses at the struggling chip giant.

Analysts expect AMD (AMD) to report a loss of 36 cents on revenue of $1.79 billion, compared with a loss of 4 cents, on revenue of 1.77 billion in the year-ago period, according to Thomson Financial.

The Sunnyvale, Calif.-based company has been struggling to become profitable over the past year as it faced stiffer competition from archrival Intel Corp. ( INTC) and grappled with the cost of a major acquisition.

AMD reported a wider-than-expected third-quarter loss of $396 million in October, largely due to a $120 million charge for its merger with ATI Technologies in 2006. The company has also struggled with product roll-out delays and mounting operating costs that some analysts warned were not sustainable.

"We are lowering our estimates to reflect continued execution missteps, an increase in operating expenses due to engineering costs and continued pressure from Intel's roadmap," analyst Doug Freedman of American Technology Research said in a research note.

Analysts believe AMD could bounce back as a stronger competitor, especially with the graphics technologies it now has after the ATI acquisition. The company also got a boost recently from an Abu Dhabi firm, which invested $622 million in AMD.

AMD executives vowed last month that his company will be back in the black in 2008, and that recent production missteps will not be repeated.

"We blew it, and we're very humbled by it," CEO Hector Ruiz told analysts in December. "We're going to learn from it, and we're not going to do that again."

However, analysts say concerns about weakening demand in North America make it harder for AMD to stage a comeback.

"For AMD, the issue is how much did they get to participate in what is a comparatively weak North America, compared to the footprint they have all around the world," said analyst Crawford Del Prete of International Data Corp.

AMD tends to do quite well in emerging markets, he said, but it's not unclear if that was enough for the company in the fourth quarter.

"It's still pretty tough times for AMD right now," he added.

So the magic mark AMD needs to hit is a loss of 200M. If they lose more than that, expect the stock to go down. If they lose less than that, it wouldn't suprise me if it shot back up to $10+ a share.

I originally estimated a larger loss, but I'm going to revise and say (300)M to (350)M loss is my best guess.

Message quoted 1 times
Message edited by TechnologyCoordinator on 01-18-2008 at 07:30:19 PM

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

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I'm guessing a larger net loss due to a much larger than expected goodwill impairment charge. :fou:

Message quoted 2 times

Reply to ritesh_laud

ritesh_laud wrote :

I'm guessing a larger net loss due to a much larger than expected goodwill impairment charge. :fou:

Word.

Reply to OlSkoolChopper

I'm expecting a larger loss than $200 million. I think it will be closer to $320 million.

I also expect Intel to hit record numbers in profit both Gross and Net.

------------------------------ "Like a child in his fantasy, punching holes in the walls of reality"
Reply to pausert20

TechnologyCoordinator wrote :

http://money.cnn.com/news/newsfeed [...] 000421.htm

Quote :

Big Losses Projected At Struggling AMD

January 11, 2008: 04:25 AM EST

SAN FRANCISCO (Dow Jones) -- Advanced Micro Devices Inc. will report fourth- quarter results next week with Wall Street projecting bigger losses at the struggling chip giant.

Analysts expect AMD (AMD) to report a loss of 36 cents on revenue of $1.79 billion, compared with a loss of 4 cents, on revenue of 1.77 billion in the year-ago period, according to Thomson Financial.

The Sunnyvale, Calif.-based company has been struggling to become profitable over the past year as it faced stiffer competition from archrival Intel Corp. ( INTC) and grappled with the cost of a major acquisition.

AMD reported a wider-than-expected third-quarter loss of $396 million in October, largely due to a $120 million charge for its merger with ATI Technologies in 2006. The company has also struggled with product roll-out delays and mounting operating costs that some analysts warned were not sustainable.

"We are lowering our estimates to reflect continued execution missteps, an increase in operating expenses due to engineering costs and continued pressure from Intel's roadmap," analyst Doug Freedman of American Technology Research said in a research note.

Analysts believe AMD could bounce back as a stronger competitor, especially with the graphics technologies it now has after the ATI acquisition. The company also got a boost recently from an Abu Dhabi firm, which invested $622 million in AMD.

AMD executives vowed last month that his company will be back in the black in 2008, and that recent production missteps will not be repeated.

"We blew it, and we're very humbled by it," CEO Hector Ruiz told analysts in December. "We're going to learn from it, and we're not going to do that again."

However, analysts say concerns about weakening demand in North America make it harder for AMD to stage a comeback.

"For AMD, the issue is how much did they get to participate in what is a comparatively weak North America, compared to the footprint they have all around the world," said analyst Crawford Del Prete of International Data Corp.

AMD tends to do quite well in emerging markets, he said, but it's not unclear if that was enough for the company in the fourth quarter.

"It's still pretty tough times for AMD right now," he added.

So the magic mark AMD needs to hit is a loss of 200M. If they lose more than that, expect the stock to go down. If they lose less than that, it wouldn't suprise me if it shot back up to $10+ a share.

I originally estimated a larger loss, but I'm going to revise and say (300)M to (350)M loss is my best guess.

Where does the 200 come from tc?

cheers

Message quoted 1 times

Reply to spoonboy

spoonboy wrote :

Where does the 200 come from tc?

cheers

Code :

Outstanding Shares * Earnings Per Share = Net Income

Or in AMD's case:

Code :

Outstanding Shares * Loss Per Share = Net Loss

Actual numbers:

Code :

554,570,000 shares * Analyst estimate of .36 loss per share = $199,645,200

Thanks for asking, I should have included that in my original post.

(PS: I highlighted the positive part in green just for you Spoon!)

Message quoted 1 times
Message edited by TechnologyCoordinator on 01-11-2008 at 10:11:17 PM

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

Well, a $200 miilion loss, while not good in and of itself, could be veiwed as good for AMD at this point. It would be a second consecutive quarter of movement in the right direction, i.e a 'trend' towards profitability. Of course, that discounts last quarters $120 million~ish ATI payments. If you take that into account, then a $200 million~ish loss could be viewed as stagnation. Im quite interested to see what the report states, Ruizs comments and how it impacts stocks.

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http://i249.photobucket.com/albums/gg233/turpit/SIG2A.jpg

Reply to turpit

Good company + poor leadership + "evolved" competition + Bad economic state = current AMD.... its sad.

Message quoted 1 times

Reply to yay

Since we are all having a bet on the figures due to be released my prediction is:

- $360 million loss.

Hector will also resign ... or goto Freescale (old AMD Peoples Home).

------------------------------ Great spirits have always encountered violent opposition from mediocre minds

Reply to reynod

yay wrote :

Good company + poor leadership + "evolved" competition + Bad economic state = current AMD.... its sad.

Excellent summary

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

TechnologyCoordinator wrote :

Code :

Outstanding Shares * Earnings Per Share = Net Income

Or in AMD's case:

Code :

Outstanding Shares * Loss Per Share = Net Loss

Actual numbers:

Code :

554,570,000 shares * Analyst estimate of .36 loss per share = $199,645,200

Thanks for asking, I should have included that in my original post.

(PS: I highlighted the positive part in green just for you Spoon!)

Thanks alot TC, I think your an ok guy too by the way. Nothing like a good argument though is there eh? lol

Heard hooters is doing a 'one feel with every 4 beers promotion this wednesday' grab chopper and lets check it out lol

Message quoted 1 times

Reply to spoonboy

ritesh_laud wrote :

I'm guessing a larger net loss due to a much larger than expected goodwill impairment charge. :fou:

Yet but asset write downs isnt quite as telling as actual cash in - cash out. Im sticking my scrawny neck out here and saying net income before write downs as -$90,000,000

Reply to spoonboy

spoonboy wrote :

Heard hooters is doing a 'one feel with every 4 beers promotion this wednesday' grab chopper and lets check it out lol

Count me in! There's one in Troy (Michigan).

Message edited by TechnologyCoordinator on 01-12-2008 at 10:19:01 PM

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

Google lists AMD shares as ~550 million, but yahoo lists it as ~600 million.

so the loss would be b/w 199 and 217 million.

With all the (questionable) activity AMD did with stock trading and offers this year, I'm not really sure how much outstanding shares there are.

However, I don't know if they lost that much. I mean, yes they sucked in terms of product, but it was Q4 (you have to suck really badly to not make decent money during Christmas time). I think what we'll see is a bigger loss than 200 million before some random charge that then brings the "reported loss" to less than 200 million (like 50-100). Which would probably make the stock go up to 8-9.

Message quoted 1 times

------------------------------ What goes in this box?
Reply to wolverinero79

wolverinero79 wrote :

Google lists AMD shares as ~550 million, but yahoo lists it as ~600 million.

Not to rain on your parade, but both Yahoo and AMD list the same number, 554,570,000.

http://finance.yahoo.com/q/ks?s=AMD (Shares outstanding)
http://finance.google.com/finance?client=ob&q=AMD (Shares)

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

while everyone is throwing numbers around, I'm going to say 250 millioin operating loss and a much larger loss on goodwill impairment writeoff. Total loss could be a billion or more. I am going out on a limb here, but why else would the stock tank so bad lately if it was just the same thing that has happened the first 3 quarters this year?
My guess is they are going to get all the trash off the balance sheet that they can since 2007 is gonna go down as one of the worst in the company's history anyway. Then hopefully the 2008 to 2007 financial comparisons will look much more favorable (hopefully).

Message quoted 2 times

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http://dcsig.liquidninjas.com/store/dcsig_6983_8319.png

Reply to gr8mikey

"Analysts believe AMD could bounce back as a stronger competitor, especially with the graphics technologies it now has after the ATI acquisition. The company also got a boost recently from an Abu Dhabi firm, which invested $622 million in AMD. "

I guess that makes them VIAble.

Message quoted 1 times

Reply to surrealdeal

surrealdeal wrote :

I guess that makes them VIAble.

Yes! we all know how that on-board S3 ProSavage video saved the day for VIA!

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Reply to gr8mikey

gr8mikey wrote :

while everyone is throwing numbers around, I'm going to say 250 millioin operating loss and a much larger loss on goodwill impairment writeoff. Total loss could be a billion or more. I am going out on a limb here, but why else would the stock tank so bad lately if it was just the same thing that has happened the first 3 quarters this year?
My guess is they are going to get all the trash off the balance sheet that they can since 2007 is gonna go down as one of the worst in the company's history anyway. Then hopefully the 2008 to 2007 financial comparisons will look much more favorable (hopefully).

Very interesting point. Considering their 2007 financials, your guess about getting trash of the balance sheet in 2007 for the benefit of 2008 seems a stratedgy with no small merit. The year is shot anyway, so wrinting off as much as they can may work long term. Of course, it the bigger the loss for Q4, the more damage to Q3s apparent improvements over Q1 &2, but still, swallowing a Q407 pill to help out 2008 numbers seems like it could work long term.

------------------------------

Reply to turpit

gr8mikey wrote :

My guess is they are going to get all the trash off the balance sheet that they can since 2007 is gonna go down as one of the worst in the company's history anyway.

Great thought there!

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

Rumor has it some heads are about to start rolling over on the green team.

Rumor also has a profit coming in Q2 of this year.

Just some thoughts I figured I would share. If I can figure out which heads these are, I will let you guys know.

Reply to weskurtz81

Update: 4Q earnings will be announced Thursday (17/01/2008) after the market closes.

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

Just a quickie as I'm up to my a$$ in metal alligaters today:

"Quebecor World prints products such as books, magazines, advertising inserts and direct-mail material. It has about 28,000 employees around the world. Its shares dropped 29 Canadian cents, or 62 percent, to 18 Canadian cents on the Toronto Stock Exchange. They are now worth a shred of their value from last February, when they changed hands at C$17.25 each."

That could never happen to AMD, right?

Reply to OlSkoolChopper

Im going to guess around the same as $320-$360 million especially since the stock has dropped dramatically since the begining of 4Q.

I feel sad about Intel as they hit their expected earnings but due to analysts expectations Intel fell short. Intel expected $10.5B-$11.1B hit $10.7B and analysts expected $10.84B.

I guess the same thing might happen to AMD if they expect a lower loss. I kinda hate how analysts ruian a stock even if the company is doing good and is selling.

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http://www.steamcalculator.com/76561197970703804/camo_sig.png

Reply to jimmysmitty

Anyone else want to have a guess at the actual figure .... time is nearly up !!!

------------------------------ Great spirits have always encountered violent opposition from mediocre minds

Reply to reynod

250-300

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

Times not up yet. Its still Wednesday in New York(or did I miss a day?) and the 17th is tomorrow. I can't wait to see.

My interest has been tempted...

------------------------------

Reply to jimmysmitty

even-225

Reply to ro3dog

NEW YORK, Jan. 16, 2008 (Thomson Financial delivered by Newstex) -- Shares of Advanced Micro Devices (NYSE:AMD) turned higher in midday trading Wednesday, bouncing sharply off earlier lows seen after rival Intel Corp. (NASDAQ:INTC) reported disappointing fourth-quarter results.

AMD's stock was last up 4.3% at $6.39, after being down as much as 5.2% earlier in the session.

The Sunnyvale, Calif. semiconductor company was not immediately available for comment.

Speculation has circulated that Middle East investors could be investing more money into AMD, according to analysts at Thomson Squawk Box. AMD had said in November that it received a $622 million equity investment from Abu Dhabi-based Mubadala Development Co.

Earlier, the stock fell along with fellow chip maker Intel, which saw its stock drop as much as 13% to a 9-month low after the company reported late-Tuesday fourth-quarter earnings per share of 38 cents and revenue of $10.71 billion, missing the mean estimates of analysts surveyed by Thomson Financial of 40 cents and $10.84 billion, respectively.

Message quoted 1 times

------------------------------ Athlon 64 AM2 6000+
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Asus 4850 512mb
Reply to caamsa

With the past quarter having AMD writing down the "goodwill" of ATI purchase, the $622M infusion, and the TLB problems - I don't think that this quarter's bottom line is going to be an accurate reflection of the company as a whole.

I think what really matters are sales - AMD needs to show they haven't lost any more marketshare to Intel/nVidia, and Gross Profit - AMD is selling a lot of product, but they need to show that they are doing so with a higher margin than the past few quarters.

Message quoted 1 times

Reply to exit2dos

May be the release of the new dual GPU cards might help AMD?
http://www.tomshardware.com/2008/0 [...] hics_card/
AMD might be releasing this early for a cause (to get back part of market share from nVidia?).

1100th Post
W00t!

Message edited by Shadow703793 on 01-17-2008 at 01:31:44 AM

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http://farm4.static.flickr.com/3553/3818083596_1a772f7162_o.gif

Reply to Shadow703793

I don't think that market share data will be out tomorrow. Anyway, I expect comments like, "performance already baked into the stock price" etc. no matter how bad the quarter is. And to some extent that's actually true. Might as well pile all the bad news on at once. But will the "promise" of profitability a year from now be good enough to boost the stock? Crazy market, indeed...

Reply to azfj60

exit2dos wrote :

With the past quarter having AMD writing down the "goodwill" of ATI purchase, the $622M infusion, and the TLB problems - I don't think that this quarter's bottom line is going to be an accurate reflection of the company as a whole.

I think what really matters are sales - AMD needs to show they haven't lost any more marketshare to Intel/nVidia, and Gross Profit - AMD is selling a lot of product, but they need to show that they are doing so with a higher margin than the past few quarters.

If that keeps up some guy with an extremely long and hard to pronounce name might end up owning AMD like CitiGroup is now owned. Don't even ask his name as I have no freakin clue just that it starts with "Prince".

I think NVidia has taken a lot of market share since almost every rig I have seen from people who self build is a 8800 series card. Even with the sales of the HD3K series I doubt the ATI division has taken back much if any market share from NVidia.

The dual GPU cards might be interesting but I doubt NVidia wont do the same and unless ATI has a trick up their sleve, such as releasing drivers that open the flood gates on all R6xx chips(I would love that) and were holding back the cards true power, then it might end up just being behind NVidias dual GPU card. I love ATI but I still feel that the buyout and having to produce chipsets for AMD caused a serious screwup with the R600. I mean a 512bit bus should wipe the floor with a 256bit bus and kick the 8800GTX/Ultra. But I guess it isn't being utilized properly.

I still stand that AMD will post more than expected losses. I think its going to hit them hard with the recalls/stop shipments of the Barcys especially and the fact that Phenom has not sold very well compared to their much cheaper Athlon X2 chips. But the X2s probably don't bring them as much cash in as a Phenom. Well tomorrow will come and we will see.

------------------------------

Reply to jimmysmitty

Prince Al-Waleed bin Talal of Saudi Arabia.

Message quoted 1 times

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

TechnologyCoordinator wrote :

Prince Al-Waleed bin Talal of Saudi Arabia.

Something like that but the one I saw was longer. lol

------------------------------

Reply to jimmysmitty

Prince Al-Walid bin Talal bin Abdul Aziz Al Saud.

(Not joking, that's his full name)

In Arabic:

الوليد بن طلال بن عبد العزيز آل سعود

Message quoted 2 times
Message edited by TechnologyCoordinator on 01-17-2008 at 04:21:35 AM

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

http://www.theinquirer.net/gb/inqu [...] n-controls

I think I've figured out their management approach at AMD TC !!

------------------------------ Great spirits have always encountered violent opposition from mediocre minds

Reply to reynod

AMD is currently at $6.59, what will we see tomorrow? over 7 or around 5?

Reply to spoonboy

Well AMD is currently bouncing upwards but that was news of Intel's missing the street's target estimate. If today's report shows a loss of under 36 cents per share, then its possibly going up.

Message quoted 1 times

------------------------------ Q9400 @3.2Ghz-HD4870 512MB GDDR5-2GB DDR2-1066
"You figured it out. All new CPU's are nothing but overclocked Pentium 1's with a few bells and whistles added, ask any ol timer whose been around."

Reply to bfellow

caamsa wrote :

Earlier, the stock fell along with fellow chip maker Intel, which saw its stock drop as much as 13% to a 9-month low after the company reported late-Tuesday fourth-quarter earnings per share of 38 cents and revenue of $10.71 billion, missing the mean estimates of analysts surveyed by Thomson Financial of 40 cents and $10.84 billion, respectively.

Are these the same analysts that kept saying, "Buy Enron." right up to the moment the stock crashed and coincidently long enough for Ken Lay to unload his stock options?

Reply to jsc

TechnologyCoordinator wrote :

Prince Al-Walid bin Talal bin Abdul Aziz Al Saud.

(Not joking, that's his full name)

In Arabic:

الوليد بن طلال بن عبد العزيز آل سعود

Better known in america as "bruce".

Message quoted 1 times

Reply to righteous

Remember, typically analysts are in for making big money as well as they own investment firms. For example, they come out with big expectations for Intel, drive the stock way up to 27-28, then slowly start dumping until it's at 22. Then, when those investment firms are empty of Intel shares and then they demonize Intel for missing their oh so holy estimate, other investors sell, thus undervaluing Intel. Analysts then pick up tons of cheap shares and the cycle will repeat.

Even now, they are saying "technology is doing a rebound today" on Bloomberg. I credit this completely on Intel's dividend.

As for AMD (I guess that's the topic of the day) - I think it can go either way. I would actually assume that AMD's price already reflects the justified negative view of AMD. So unless there's some huge loss that no one expected (like 500-900 million range), AMD will probably be stable or go up. If AMD is able to come up with small losses (<300 million) and somehow paint a nice lie about the future, then they may steadily rise over the next few days.

If AMD actually made a profit (HA!) then their stock should shoot through the roof.

------------------------------ What goes in this box?
Reply to wolverinero79

I bought some AMD at $6 and more at $5.50 so I'm hopefull. I also bought Citigroup this week. My fingers are crossed. We shall see.

Message quoted 1 times

Reply to ImajorI

I think a new CEO would help AMD.

Reply to ImajorI

ImajorI wrote :

I bought some AMD at $6 and more at $5.50 so I'm hopefull. I also bought Citigroup this week. My fingers are crossed. We shall see.

Citigroup would be a good one to get into post sup-prime losses announcement and share price drop. Could be a good one to hold onto into the market likes them again, nice profit on that on.

Reply to spoonboy

righteous wrote :

Better known in america as "bruce".

lol actually its 'Larry'

Message quoted 1 times

Reply to spoonboy

bfellow wrote :

Well AMD is currently bouncing upwards but that was news of Intel's missing the street's target estimate. If today's report shows a loss of under 36 cents per share, then its possibly going up.

I wouldn't put it down to just Intel's lowering share price, as that would have had a more immediate impact at start of trading yesterday, instead of 2 hours into the day.

Instead, I'd say that AMD's sudden jump was more down to AMD's deal with DivX (which immediately preceded the jump) and intel's continued low share price through the day simply helped AMD to maintain the new, higher, share price.

Reply to coret

spoonboy wrote :

lol actually its 'Larry'

Larry the investment banker Cable Guy?

------------------------------ jennyh wrote: AMD break-even Q4 2009. *Gauranteed*

RabidFanboysSpreadingFalse.Info
Reply to TechnologyCoordinator

Yeah thats the one, always wheres that green coat...

lol

Reply to spoonboy

something around (350)-(370)...
share price after announcement: 6.5-6.75 at the day end...

Message quoted 1 times
Message edited by mahoumatic on 01-17-2008 at 08:41:14 PM

Reply to mahoumatic

AMD Reports 4Q Earnings; (170)M - Wall Street is Pleased

Forum CPU & Components : CPUs - AMD Reports 4Q Earnings; (170)M - Wall Street is Pleased

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AMD Reports 4Q Earnings; (170)M - Wall Street is Pleased

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