Advanced Micro Devices (NYSE: AMD): Q2 Earnings Preview 2011

Advanced Micro Devices, Inc. (NYSE: AMD) is scheduled to release second quarter earnings after the closing bell on Thursday, July 21, 2011. Analysts, on average, expect the company to report earnings of 8 cents a share on revenue of $1.58 billion. In the year ago quarter, the company reported earnings of 11 cents per share on revenue of $1.65 billion. The company has reported a profit in only four of the past 10 years.

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. Founded in 1969, AMD has less than 20 percent of the PC- processor market.

In the preceding first quarter, the Sunnyvale, California-based company's net income was $510 million, or 68 cents per share, compared to $257 million, or 35 cents per share, in the year-ago quarter.  On an adjusted basis, the company earned 8 cents a share in the first quarter. Revenue grew 2% to $1.61 billion from $1.57 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 5 cents a share on revenue of $1.61 billion. 

At its last earnings call in April, AMD said that it expects second quarter revenue to be flat to slightly down sequentially..

US chip makers have posted stronger results recently, with companies seeing significant boosts because of high demand from businesses or for smartphones. And analysts expect more of the same in the most recent quarter, pegging most of the bigger companies for better results than last year. Still, consumer demand for personal computers was weak in the first quarter and hasn't particularly shown signs of ramping up in the second quarter.

AMD's latest Fusion technology coupled with the early Intel Sandy Bridge recall, have given AMD a great boost. The company’s new range of chips, called Llano, is likely to help it win market share in notebook computers against Intel Corp. (NASDAQ: INTC). AMD’s Llano maintains lower power consumption and performs better when there is multi-tasking involved with heavy video or graphic processing. The new chips may help AMD bounce back in one particularly important segment: notebook processors. The company is now hiring Android driver development engineers, which shows that the company is  clearly looking to make a significant push into mobile computing. AMD has also seen solid demand for its Brazos platform for notebooks with sales crossing 1 million in its debut quarter. If AMD can effectively leverage the demand for tablets and other mobile devices through its Llano and Brozos processors, this could give a significant boost to its market share.

However, AMD is running without a permanent CEO. In January, the company announced the abrupt resignation of its then president and chief executive officer Dirk Meyer and appointment of chief financial officer Thomas Seifert as interim CEO. The chipmaker is looking for a CEO who can implement a change in direction mandated by the company’s board, led by Chairman Bruce Claflin.

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Advanced Micro Devices (NYSE: AMD): Q1 Earnings Preview 2011

Advanced Micro Devices, Inc. (NYSE: AMD) is scheduled to release first quarter earnings after the closing bell on Thursday, April 21, 2011. Analysts, on average, expect the company to report earnings of 5 cents a share on revenue of $1.61 billion. In the year ago quarter, the company reported earnings of 9 cents per share on revenue of $1.57 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 fourth quarter, the Sunnyvale, California-based company's net income was $375 million or $0.50 per share, compared to $1.18 billion or $1.52 per share, in the year-ago quarter. On an adjusted basis, the company earned 14 cents a share in the fourth quarter. Revenue remained flat with last year at $1.65 billion. Analysts, on average, expected the company to report earnings of 11 cents per share on revenue of $1.63 billion.

At its last earnings call in January, the company said that that it was seeing better-than-seasonal demand in the first quarter, expecting revenue to be flat to down about 4% from the fourth quarter's $1.65 billion. The company stunned investors in January with news that its chief executive, Dirk Meyer, was stepping down immediately, and it hasn't yet named a successor.

US chip makers have posted stronger results recently, with companies seeing significant boosts because of high demand from businesses or for smartphones. And analysts expect more of the same in the most recent quarter, pegging most of the bigger companies for better results than last year. Still, consumer demand for personal computers was weak in the fourth quarter and hasn't particularly shown signs of ramping up in the first--Gartner Inc. (IT) in March cut back its growth forecast for personal-computer shipments, though it did say it expected mobile PC alternatives like Apple Inc.'s (NASDAQ: AAPL) iPad to continue taking share. 

In addition, worries about constrained supplies from Japan following last month's earthquake and tsunami have hit the sector. While Japan isn't expected to hurt chip makers' first-quarter results, the full impact still is unknown and could show up in guidance.

AMD's latest Fusion technology coupled with the early Intel Sandy Bridge recall, have given AMD a great boost. AMD is now set to launch its Llano APU second quarter of 2011 to compete with Intel’s (NASDAQ:INTC) Sandy Bridge. AMD’s Llano maintains lower power consumption and performs better when there is multi-tasking involved with heavy video or graphic processing. The new chips may help AMD bounce back in one particularly important segment: notebook processors.

Meanwhile, AMD’s market share in server microprocessors has fallen from its peak of about 25% in 2006 to a mere estimated 7% in 2010. In notebooks, AMD only holds an estimated 13.6% market share. On top of this, the company is not competitive in the mobile space to challenge Intel’s Atom yet. The company is now hiring Android driver development engineers, which shows that the company is clearly looking to make a significant push into mobile computing. AMD’s Brazos platform for mobile devices could well challenge Intel’s Atom in netbooks.

In February, Apple Inc. said that its updated MacBook Pro notebooks will feature the chip company’s graphics processors. The announcement was a major boon to AMD, which has struggled lately from stiffer competition with rival Intel Corp. (NASDAQ: INTC).  

Starting from the first fiscal quarter , the chipmaker announced that 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. 

The company's stock currently trades at a forward P/E  (fye Dec 25, 2012) of 11.57 and PEG ratio (5 yr expected) of 1.39. In terms of stock performance, AMD shares have lost nearly 15 percent over the past year. 

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AMD Rallies On Renewed Takeover Chatter

Shares of Advanced Micro Devices, Inc. (NYSE: AMD) rose more than 1.5% on Tuesday on renewed speculation that the chipmaker could be acquired.  Stay tuned for more.

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Advanced Micro Devices Inc. (NYSE: AMD): Q1 Earnings Preview 2010

Advanced Micro Devices, the second largest chipmaker in the world, is scheduled to release Q12010 earnings after the market close on Thursday, April 15, 2010. Analysts, on average, expect the company to report a loss of $0.10 per share in the first quarter with estimates ranging from a loss of $0.27 to a profit $0.04 per share. Revenues for the quarter are estimated to be $1.53 billion. In the Q12009, AMD reported a loss of $0.66 per share on revenue of $1.18 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 Q42009, the Sunnyvale, California-based company reported that it swung to a profit of $1.18 billion or $1.52 per share, compared to a net loss of $1.44 billion, or $2.36 per share, in the prior-year quarter. On an adjusted basis, the company posted a loss of $57 million, compared to a loss of $424 million in the year-ago quarter. Revenue jumped 42% to $1.65 billion from $1.16 billion in the same quarter last year. Analysts, on average, expected the company to report a loss of $0.18 per share on revenue of $1.49 billion.

The chip maker said in January it will stop including results from its spun-off manufacturing operations in the latest quarter, a development that analysts expect to make it easier for AMD to remain profitable. The company will recognize a one-time, non-cash gain of $325 million related to its deconsolidation of GlobalFoundries Inc. for the quarter ended March 27, according to a regulatory filing with the Securities and Exchange Commission.

For the first quarter of 2010, AMD expects revenue to be down seasonally, operating expenses are expected to be approximately $550 million through the salary reinstatement performance related accruals in some R&D project expenses, and taxes expected to be approximately $3 million.

The company expects gross margin to be in the range of 40 to 45%; SG&A to be in the range of 14 to 17% of sales; depreciation and amortization to be in the range of $340 million to $370 million; capital expenditures to come in at approximately $120 million; profitability on an operating income levels throughout the year and free cash flow to be positive.

The chipmaker is likely to benefit from a strong rebound in worldwide PC shipments, signaling an economic recovery. With the economic recovery picking up, PC shipments this year will grow by 12.6% year-over-year to 333.2 million units, according to IDC's forecast. The Semiconductor Industry Association predicts that worldwide industry sales will grow 10% in 2010, to $242 billion, and another 8% in 2011, to around $262 billion.

The company has managed to gain market share in recent months. It's share of sales of microprocessor chips -- the brains of a computer -- amounted to 12.1 percent, a gain of 1.6 percentage points from the year-ago fourth quarter, according to the industry tracker IDC.

Late in March, AMD rolled out its much-anticipated 12-core “Magny-Cours” Opteron chip. A number of OEMs, including HP, Dell, Acer, SGI and Appro, are launching servers based on the new AMD chips. Both AMD and Intel are positioning themselves for the expected refresh of corporate servers, as businesses look to replace older systems that they have been holding on to because of the drastic cutbacks in IT spending due to the global recession.The demand for new processors may also get a boost from escalating trend towards cloud computing and virtualization. Broadpoint Amtech projects server sales of approximately 14.1 million units this year, up 19 percent year-over-year and from its previous estimate of 13.9 million units. It expects more action in the first half of the year, with the second half cooling off to 7 percent and 5 percent year-over-year growth in the third and fourth quarter, respectively.

Among other developments during the quarter, Advanced Micro Devices Inc. has renewed its patent license agreement with Rambus Inc.. The original term of Advanced Micro Devices' agreement runs through the end of September this year. The renewal extends the patent license through the third quarter of 2015.

In terms of stock performance, AMD shares have lost nearly 3 percent since the beginning of the year.

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Advanced Micro Devices Inc. (NYSE: AMD): Q4 Earnings Preview 2009

Advanced Micro Devices Inc. (NYSE: AMD), the world's second largest chipmaker, is scheduled to release its financial results for first quarter of fiscal year 2009 after the market close on Monday, January 25, 2010. Analysts, on average, expect the company to report a loss of 18 cents a share on revenue of $1.49 billion. In the year ago quarter, the company reported a loss 69 cents per share on revenue of $1.16 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 October, the Sunnyvale, California-based company reported a third quarter loss of $128 million, or 18 cents a share, compared with a loss of $134 million or 22 cents a share in the year-earlier period. Revenue dropped to $1.4 billion from $1.8 billion. Analysts, on average expected the chip maker to report a loss of 42 cents a share on revenue of $1.26 billion. Third quarter 2009 AMD gross margin was 42%, compared to 37% in the prior quarter.

AMD expects its product revenue "to be up modestly for the fourth quarter of 2009."

The demand for chips improved in the second half of 2009 amid signs of economic stabilization. The release of Microsoft's (NASDAQ: MSFT) Windows 7 operating system in October and growing demand for consumer electronics also boosted chip sales. Global semiconductor sales rose to $22.6 billion in November, up 3.7% from October and up 8.5% year over year, according to the Semiconductor Industry Association. The SIA now predicts that worldwide industry sales will grow 10% in 2010, to $242 billion, and another 8% in 2011, to around $262 billion.

In November, AMD settled all outstanding legal disputes with Intel Corp. (NASDAQ: INTC), including anti-trust and patent cross license disputes, with latter agreeing to pay AMD $1.25 billion. In return, AMD agreed to drop all its regulatory complaints worldwide and all pending litigation, including a case in U.S. District Court in Delaware and two cases in Japan. In addition, AMD and Intel announced that they would obtain patent rights from a new 5-year cross-license agreement and will give up any claims of breach from the previous license agreement.

Following its agreement with Intel, the chipmaker augmented its balance sheet and announced moves that could potentially bring down its debt due in 2012 to $485 million and reduce its total debt by $890 million. AMD said it will use cash to redeem and retire roughly $390 million in high-yield debt due in 2012, and use cash and a new debt offering of $500 million of senior notes to be due in 2017 to tender for up to $1 billion on $1.485 billion of convertible notes due in 2012.

AMD shares got a boost last month after Intel's plan to launch its first standalone graphics chip suffered a setback. Intel announced in December that it was delaying indefinitely the release of a graphics chip based on its Larrabee architecture. Larrabee was designed to compete with GPUs from nVidia and AMD currently used in many desktop PCs. Meanwhile, Intel has also come under increased scrutiny because of incentives it provided to PC makers to hurt rivals like AMD. Last month, U.S. consumer watchdog Federal Trade Commission has sued Intel for allegedly using a dominant market position for a decade to stifle competition and to strengthen monopoly.

In terms of stock performance, AMD shares have gained 137 percent over the past year.

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Intel Corporation (NASDAQ: INTC): Q4 Earnings Preview 2009

Intel Corporation (NASDAQ: INTC), the world's biggest chipmaker, is scheduled to release financial results for fourth quarter on Thursday, January 14, 2010. Analysts, on average, expect the company to report earnings of 30 cents a share on revenue of $10.16 billion. In the year ago quarter, the company reported earnings of 4 cents per share on revenue of $8.23 billion. The company expects to report fourth quarter revenue of $10.1 billion, plus or minus $400 million, and gross margin of 62%, plus or minus 3 percentage points.

Intel Corporation designs, manufactures, and sells integrated circuits for computing and communications industries worldwide. It offers microprocessor products used in desktops, nettops, workstations, servers, embedded products, communications products, notebooks, netbooks, mobile Internet devices, and consumer electronics, as well as in embedded designs, such as industrial equipment, point-of-sale systems, panel PCs, automotive information/entertainment systems, and medical equipment. In the third quarter of 2009, Intel accounted for 81.1 percent of global microprocessor revenue, according to market research firm IDC.

In October, the Santa Clara, California-based company reported that its third quarter profit fell 7.5% from last year amid lower revenue and deteriorating margins due to weak demand and lower prices for its chips. Net income dropped to $1.86 billion or $0.33 per share, compared to $2.01 billion, or $0.35 per share, in the prior-year quarter. Revenue declined 8% to $9.39 billion from $10.22 billion in the same quarter last year. Third quarter revenue grew 17% sequentially. Thirty-five analysts had a consensus revenue estimate of $9.04 billion for the third quarter. Gross margin for the third quarter fell to 57.6% from 58.9% a year earlier.

Like most chipmakers, Intel suffered a sharp drop in demand of its products after last year's global financial panic and a severe economic downturn. However, demand for chips improved in the second half of 2009 amid signs of economic stabilization. The release of Microsoft's (NASDAQ: \MSFT) Windows 7 operating system in October, growing demand for consumer electronics and a rebound in corporate orders also boosted chip sales. Global semiconductor sales rose to $22.6 billion in November, up 3.7% from October and up 8.5% year over year, according to the Semiconductor Industry Association. The SIA now predicts that worldwide industry sales will grow 10% in 2010, to $242 billion, and another 8% in 2011, to around $262 billion.

In November, Intel settled all outstanding legal disputes with Advanced Micro Devices Inc. (NYSE: AMD), including anti-trust and patent cross license disputes, with Intel agreeing to pay AMD $1.25 billion. In return, AMD agreed to drop all its regulatory complaints worldwide and all pending litigation, including a case in U.S. District Court in Delaware and two cases in Japan. As a result, Intel raised its fourth quarter spending (R&D plus MG&A) outlook to be approximately $4.2 billion, up from $2.9 billion. The two companies also entered into a new 5-year patent cross license agreement.

Also, in November, New York Attorney General Andrew Cuomo filed a federal antitrust lawsuit against Intel, charging that the maker of computer microprocessors paid billions of dollars in kickbacks and threatened computer manufacturers to prevent the sale of competitors' products. Last month, U.S. consumer watchdog Federal Trade Commission has sued Intel for allegedly using a dominant market position for a decade to stifle competition and to strengthen monopoly. Intel responded that it has competed fairly and lawfully, and the FTC's case is misguided.

In December, the company's plan to launch its first standalone graphics chip suffered a setback after it announced it was delaying indefinitely the release of a graphics chip based on its Larrabee architecture. Early in January, the tech giant unveiled new products at the Consumer Electronics Show in Las Vegas, including new PC chips based on its 32-nanometer technology.

Among other developments, the company raised its quarterly cash dividend by 12.5% during the third quarter. Intel will now pay a dividend of $15.75 per share or $0.63 per share on an annual basis.

The company's stock currently trades at a forward P/E (fye 27-Dec-10) of 13.89 and PEG ratio (5 yr expected) of 2.80. In terms of stock performance, Intel shares have gained 39 percent over the past year.

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Advanced Micro Devices Inc. (NYSE: AMD): Third Quarter Earnings Preview 2009

Advanced Micro Devices Inc. (NYSE: AMD) is scheduled to report third-quarter results after the market close on Thursday, October 15, 2009. Analysts, on average, expect the company to report a loss of 42 cents a share on revenue of $1.25 billion. In the year ago quarter, the company reported a loss of 11 cents per share on revenue of $1.78 billion.

The chipmaker has not managed to post a profit in last 11 quarters. On July 21, 2009 AMD announced that it suffered a loss of $ 335 million for the second quarter of 2009.Revenue plunged 13% from $1.36 billion for the same period last year. The company has been hit hard by a slump in chip industry and has been fast losing its market share to industry leader Intel Corp. (NASDAQ: INTC).According to Gartner Inc., worldwide chip revenue is on track to drop 17% on a year-over-year basis in 2009. That projection is less severe than an earlier forecast of a 22% decline for the year. AMD posted a loss of $3.09 billion for FY 2008, while Intel's net income was $5.2 billion giving AMD a huge disadvantage when trying to allot money towards R&D ($5.722 billion by Intel compared to AMD's $1.84 billion). In the rapidly growing netbook market, where Intel's atom processor is the market leader, AMD still doesn't have presence.

A recent report by Mercury Research showed that AMD's market share slipped from 20.9 percent to 18.7 percent in the second quarter, lower than the 18.8 percent share the firm recorded in the second quarter of 2008. Intel, meanwhile, saw its share increase from 80.0 percent a year ago to 80.5 percent, up from 78.2 percent during the first quarter of 2009. Recent price war between Intel and AMD has taken a heavy toll on the latter. Because Intel is much bigger than AMD, it is able to cut costs more effectively and as a result the losses in profit margins do not affect Intel as severely. AMD's adjusted gross margin has plummeted from 45% in third quarter 2008 to 29% in second quarter 2009. The balance sheet of the company is far too debt burdened and actually has negative shareholder equity.

AMD recently spun off its manufacturing faculties, creating GlobalFoundries in a joint venture with the Advanced Technology Investment Co. and Mubadala Development Co., both of Abu Dhabi. The deal eased some of the financial pressure on AMD as it moved part of its debt to the new company.

Though there are few early signs of stabilization in chip industry a sustained recovery still remains elusive. Worldwide chip sales climbed for the sixth consecutive month in Agust, according to the Semiconductor Industry Association. However, chip sales were still down 16.1% year-over-year in August.

In terms of stock performance, AMD shares are down almost 32% since the beginning of the year. Shares of the chipmaker rose 37 or 6.72% to close at $5.88 on Friday.

Disclosure: Author doesn’t own any of the stocks discussed here.