Thursday, January 20, 2011

Advanced Micro Devices (NYSE: AMD): Q4 Earnings Preview 2010

Advanced Micro Devices, Inc. (NYSE: AMD) is scheduled to release fourth quarter earnings after the closing bell on Thursday, January 20, 2010. Analysts, on average, expect the company to report earnings of 11 cents a share on revenue of $1.62 billion. In the year ago quarter, the company reported earnings of $1.52 per share on revenue of $1.65 billion.

Advanced Micro Devices, Inc., a semiconductor company, provides processing solutions for the computing, graphics, and consumer electronics markets in the United States, Canada, Europe, and Asia.

In the preceding third quarter, the Sunnyvale, California-based company's net loss was $118 million, or 17 cents a share, compared with a loss of $128 million, or 18 cents a share, in the year-ago quarter. On an adjusted basis, the company earned 15 cents a share in the latest quarter. Revenue grew 16% to $1.62 billion from $1.4 billion. Analysts, on average, expect the company to report earnings of 6 cents per share on revenue of $1.61 billion. GAAP gross margin for the quarter improved to 46% from 42% a year ago, while non-GAAP gross margin rose to 46% from 38% last year. 

At its last earnings call in October, AMD said that it expects revenue to be approximately flat sequentially for the fourth quarter of 2010. 

The company has benefited from a rebound in semiconductor demand and Windows 7 PC upgrade cycle. Consumer spending may be down in developed markets but corporate markets have been strong and emerging markets like India and China have been picking up the slack. Recently, the Semiconductor Industry Association predicted that worldwide chip sales for 2010 would total $300.5 billion, an increase of 33 percent over 2009 sales. That's more than the group had predicted in June, when it forecast 2010 sales of $290.5 billion. 

Recently, AMD unveiled its much-anticipated low-power Fusion Accelerated Processing Unit chips for notebooks and desktops. The low-power Fusion APU loaded Tablets and embedded devices would be made available in the first quarter of this year. A Fusion APU comprises of x86 CPU crammed with GPU and dedicated Unified Video Decoder 3.0 HD video acceleration block for better video output. 

Among other developments, the chipmaker announced that starting the first fiscal quarter of 2011, the company will begin accounting for its investment in GlobalFoundries Inc. under the cost method and will no longer recognize any share of GlobalFoundries' net income (loss) in its statements of operations. Details regarding this change in accounting treatment will be provided during AMD's earnings conference call to report its financial results for the fiscal quarter and fiscal year ended December 25, 2010.

In terms of stock performance, AMD shares have lost nearly 10 percent over the past year. 

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