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Advanced Micro Devices, Inc. Message Board

  • patels_76 patels_76 Dec 11, 2006 3:42 PM Flag

    AMD may lower 4QCY06 expectations

    Note
    December 11, 2006
    United States
    FOR REG AC CERTIFICATION, SEE
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    1. FOR OTHER IMPORTANT
    DISCLOSURES, SEE APPENDIX 1,
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    REPRESENTATIVE.
    Americas: Technology: Semiconductors: GS
    US Semi Weekly - AMD, and TXN previews
    and NAND update


    AMD may lower 4QCY06 expectations at its analyst meeting
    AMD (Neutral) is hosting an analyst meeting on Thursday, which we expect to focus on
    the company?s financial model, market positioning and manufacturing strategy. We
    believe the event may serve as a negative catalyst for the stock, as we think AMD is likely
    to lower Street 4QCY06 revenue and gross margin expectations in light of weak pricing,
    particularly in the high margin server segment, as well as the integration of the ATI
    acquisition. We continue to see about 10% downside to our $19 twelve-month price
    target, which is based on a 16X multiple applied to normalized EPS of $1.20. We believe
    the greatest risk to our price target is significant share gains.
    TI: Expect 4QCY06 guidance to be lowered toward the low end of current range
    We expect Texas Instruments to lower its guidance during its mid-quarter update Monday
    after the close toward the low-end of current $3.46-3.75bn (flat to -8% qoq) range/EPS
    $0.40-0.46; GS $3.60bn (-4.3% qoq)/$0.43, Street $3.60bn (-4.3% qoq)/$0.42. We
    believe the inventory correction through the supply chain continues to plague the industry
    and has now hit TI?s analog segment. Relative to the stock, while we still think it?s
    overvalued at $29, we don?t think that this update will be a negative trading catalyst as the
    Street is well aware of the weakness this quarter.
    LSCC: Some risk to 4QCY06 guidance for revenue (0% to 4%)
    There is some downside risk to Lattice?s 4QCY06 guidance for revenue (0% to +4% qoq)
    and gross margin (flat to +/-1% qoq) due to the same supply chain inventory correction
    that is hitting others in the sector.
    NAND contract prices declined 10-25% since 11/22/06
    December NAND contract prices, released last Friday, showed significant price declines
    of 10-25%, depending on the configuration. Relative to SPE stocks, while the Street is
    arguing that DRAM spending will prevent a severe SPE downturn, we argue that
    significant NAND excess capacity (as evidenced by these NAND price declines) will
    back up into DRAM thus driving DRAM prices down and driving a second leg of SPE
    order weakness in 2H07 with 1H07 SPE order weakness coming entirely from NAND.
    The Goldman Sachs Group Inc. does and seeks to do business with companies covered in
    its research reports. As a result, investors should be aware that the firm may have a
    conflict of interest that could affect the objectivity of this report.
    Investors should consider this report as only a single factor in making their investment
    decision.

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    • Well, some of this may be true, but there have been shortages of AMD chips for some time, now and the number of chips sold through has got to be tremendous. Margins should be ok with duallies for $140 and way on up and Athlon singles in the high double figures, I would expect AMD to write off everything including the kitchen sink along with ATI acquisition, but that less one-time items, things will look good considering share gain in Q4.

      Q1 should be a knockout with the advent of 65nm and Vista-the resource hog. You can buy memory later, but you need the mobo and the cpu now.

      Check 5-year comparison chart with Intel.

    • The last time AMD went below 20 was on 21 July. It was above 20 again by 4 August. The issue at the time was the ATI purchase. The uncertainties about that deal are slowly being resolved. The resulting overall margin from the product mix of the two companies is still a big question. However, when you consider that ATI is the bigest component maker for all flat panel TVs, you begin to wonder how bad that overall margin will be. After the merger, certain low margin products might have been eliminated. Not even GS knows what changes were made by AMD. We might get further info on such matters on Thursday and I hope GS isn't invited.

    • "investors should be aware that the firm may have a
      conflict of interest that could affect the objectivity of this report"

    • All this garbage about the 4th qtr is already in the stock. Everyone knows that it will be weak. It's next year that is in play now. AMD along with other Semi's are all at the bottom of the trading range. Longs keep your cool. Shorts watch your position because this ship has already made a turn and heading towards you..

    • Wow. They do not quit do they.
      I gues his boss told him to do this so they could squeez a little more.
      I do not get it.
      Maybe they are just wrong.
      Even worse maybe he is right....Nah!
      Cmos basically said what AMD will say here.
      Pricing should not be a problem this qtr.
      Prices did ease. and 65nm is shipping to Manufactures.
      MARket share? Servers? he must be kidding because both IBM and Sun just had record months.
      They will not get my shares this week

    • Hey Amdroids,TOLD YOU SO !!!

      • 1 Reply to dr_max_facts
      • And AMD may raise expectations. Right now its all just a guess. If GS really beieves that there is a 10% decrease risk to their $19 price target, why is it rated a neutral?

        If I was an analyst that had a real basis for a stock to fall to $17.10, and it was currently in the $21 range, I would recommend a sell, not a neautral. Thats a 22% potential move, and its a neutral????????

        More anal-lyst manipulation. I'm betting GS is buying currently, and thats why its rated a neutral

    • Do you have a link to any of that bullshit you just posted or are we to beleive you?

      Let me say this "We beleive that amd will revise upward their earnings on strong sales"...hows that suit you?

 
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