Advanced Micro Devices (AMD) posted results of EPS at $0.10 before a huge spate of merger charges and revenues of $1.77 Billion; expectations were a bit skewed around the $0.10 and revenues were expected to be $1.73 Billion. Since they warned less than two-weeks ago, this one was a sleeper and not worth much coverage. The company posted GAAP margins of 36% on a gross basis and 40% on a non-GAAP gross basis, and it believes it took market share again. In a seasonally down first quarter, AMD expects revenue to be in the range of $1.6 to $1.7 billion. Next quarter estimates are $1.82 Billion in revenues, so this is yet another warning after making only a penny.
Analyst may be baffled, but if there are too many comments on lower margins and pricing wars lasting longer and being deeper than they imagined then they just aren’t looking ahead at all. Yes it is worse than expected, but no one should have been expecting anything good today. One thing that may keep AMD weak from here on it out is that Intel has been discussed this week as going back into the many-core graphics chip interface arena after exiting before, but this would be a direct assault to AMD’s ATI unit and against NVIDIA (NVDA).
Shares are halted at the news time; Intel (INTC) is trading down 0.6% at $20.42, so maybe they are throwing these under the bus again.
Jon C. Ogg
January 23, 2007
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