AMD Faces Raised Bar For Earnings Expectations (AMD, INTC)

Advanced Micro Devices Inc. (NYSE: AMD), Intel’s only quasi-rival, is on deck for earnings today after the closing bell today.  Thomson Reuters estimates are for -$0.07 EPS and $1.54 billion in revenues.  The estimates were -$0.10 EPS and $1.53 billion in revenue before Intel’s strong report.  What we are most focused on is the relative move and raised bar that has come up in recent days.

Next quarter estimates are -$0.08 EPS and $1.52 billion, although the estimate was -$0.09 EPS on $1.52 billion in revenue before the Intel report.  Estimates for 2010 are now -$0.09 EPS on $6.46 billion in revenues; 2011 estimates are $0.20 EPS on $6.89 billion in revenues.  Both earnings estimates have risen for 2010 and 2011 in the last two days.

So, what is the low down skinny?  As AMD has lost money as far back as memory serves and since estimates have just been raised, it might not be fair to demand a profit yet…. But the need to great has to be even greater now.

Options traders appear to be braced for a move of up to about $0.40 or $0.45 in either direction, although tomorrow is options expiration date.

Analysts have an average price target of $9.66, so the implication is that at $10.00 today the stock either will need to pull back or the analysts will have to chase the stock with higher targets.

As far as recent share performance, the stock is up from a 52-week low of $3.17 or up over 200%.  The price of $10.06 is indicated as new 52-week high with shares having traded at $3.17 to $10.06 in the last 52-weeks.

The expectations have been raised, and Intel and other tech and chip companies have raised the bar for the company now.

JON C. OGG