Sign in with
Sign up | Sign in
Your question

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

Last response: in CPUs
Share
January 11, 2008 4:59:41 PM

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/newsfeeds/articles/djhighligh...

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.
January 11, 2008 5:23:06 PM

I'm guessing a larger net loss due to a much larger than expected goodwill impairment charge. :fou: 
January 11, 2008 5:25:33 PM

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


Word.
January 11, 2008 5:26:46 PM

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.
January 11, 2008 5:58:49 PM

TechnologyCoordinator said:
http://money.cnn.com/news/newsfeeds/articles/djhighligh...

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
January 11, 2008 7:08:47 PM

spoonboy said:
Where does the 200 come from tc?

cheers



  1. Outstanding Shares * Earnings Per Share = Net Income


Or in AMD's case:

  1. Outstanding Shares * Loss Per Share = Net Loss


Actual numbers:

  1. 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!)
January 12, 2008 5:30:02 AM

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.
January 12, 2008 6:18:25 AM

Good company + poor leadership + "evolved" competition + Bad economic state = current AMD.... its sad.
a b à CPUs
January 12, 2008 8:00:35 AM

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).


January 12, 2008 3:52:03 PM

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


Excellent summary
January 12, 2008 6:52:55 PM

TechnologyCoordinator said:
  1. Outstanding Shares * Earnings Per Share = Net Income


Or in AMD's case:

  1. Outstanding Shares * Loss Per Share = Net Loss


Actual numbers:

  1. 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
January 12, 2008 6:57:57 PM

ritesh_laud said:
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
January 12, 2008 7:18:48 PM

spoonboy said:
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).
January 12, 2008 7:24:02 PM

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.
January 12, 2008 8:34:15 PM

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).
January 12, 2008 8:37:27 PM

"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.
January 12, 2008 8:43:15 PM

surrealdeal said:

I guess that makes them VIAble.


Yes! we all know how that on-board S3 ProSavage video saved the day for VIA!
January 12, 2008 8:43:16 PM

gr8mikey said:
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.
January 12, 2008 9:01:41 PM

gr8mikey said:
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!
January 12, 2008 9:27:19 PM

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.
January 16, 2008 4:52:13 PM

Update: 4Q earnings will be announced Thursday (17/01/2008) after the market closes.
January 16, 2008 6:39:52 PM

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? :) 

a c 127 à CPUs
a b À AMD
January 16, 2008 8:42:51 PM

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.
a b à CPUs
January 16, 2008 8:54:10 PM

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

a c 127 à CPUs
a b À AMD
January 16, 2008 9:01:28 PM

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...
January 16, 2008 9:30:59 PM

even-225
January 16, 2008 9:51:14 PM


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.
January 16, 2008 10:12:28 PM

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.
January 16, 2008 11:31:45 PM

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...
a c 127 à CPUs
a b À AMD
January 17, 2008 12:18:38 AM

exit2dos said:
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.
a c 127 à CPUs
a b À AMD
January 17, 2008 1:10:58 AM

TechnologyCoordinator said:
Prince Al-Waleed bin Talal of Saudi Arabia.


Something like that but the one I saw was longer. lol :p 
January 17, 2008 1:21:03 AM

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
January 17, 2008 11:10:09 AM

AMD is currently at $6.59, what will we see tomorrow? over 7 or around 5?
January 17, 2008 11:15:12 AM

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.
a c 172 à CPUs
January 17, 2008 11:55:13 AM

caamsa said:
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?
January 17, 2008 12:20:44 PM

TechnologyCoordinator said:
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".
January 17, 2008 12:37:03 PM

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.
January 17, 2008 12:38:23 PM

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. :) 
January 17, 2008 12:39:12 PM

I think a new CEO would help AMD.
January 17, 2008 12:43:27 PM

ImajorI said:
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.
January 17, 2008 12:43:54 PM

righteous said:
Better known in america as "bruce".


lol actually its 'Larry'
January 17, 2008 2:34:40 PM

bfellow said:
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.
January 17, 2008 3:43:39 PM

spoonboy said:
lol actually its 'Larry'



Larry the investment banker Cable Guy?
January 17, 2008 4:23:24 PM

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

lol
January 17, 2008 5:40:22 PM

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