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Advanced Micro Devices, Inc. Message Board

  • rorycantread rorycantread Oct 17, 2013 7:12 PM Flag

    Oh my. Listen to all the excuses.

    It's pretty obvious why AMD will be downgraded tomorrow and watch its share price slip gradually into the 2s.

    By growing revenue sequentially by a whopping 26% quarter-over-quarter, but then telling the Street that next quarter growth would be only a tiny fraction of that sequentially, AMD reveals itself and its console business as a "one trick pony".

    In other words, Q3 is looking more like a one-time event than a sustainable growth model. If the console business is a sound growth engine, then why the cliff sequentially Q3 to Q4? Basically its says consoles will sell well on launch, but in ever decreasing numbers afterwards, and MSFT and Sony bought as many chips as they'll need for the next several quarters all in Q3 (likely due to AMD price incentives).

    That means no recurring revenue stream and no other bright ideas to replace the console revenues that will shrink to almost nothing next year. AMD's share price swelled to the 4s based on the assumption that management had turned things around. What investors learned today is that this management team is prone to cheap tricks and outright scamming the Street.

    This isn't the first time, either. In Q2 2012 Rory told the Street with a straight face that Llano was selling extremely well. In Q3 2012, he then took a massive inventory write-down because contrary to his little fib, Llano wasn't selling at all. This time around it was blah, blah, bah, long term growth, sustainable, blah, blah, blah... But The new CFO is apparently more afraid of prison that is Rory. He wouldn't lie about Q4, and as a result, the channel stuffing of console chips in Q3 and resulting meltdown of console chip revenues in subsequent quarters (Llano all over again) was exposed to investors.

    No wonder nVidia skipped bidding on the console business. There's no money in supplying chips for consoles. AMD just proved that in spades.

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    • MSFT and Sony bought as many chips as they'll need for the next several quarters all in Q3 (likely due to AMD price incentives).

      This is also #$%$. Based on their number for sales increases for the graphics division they sold less than 4million processors to Sony and Apple during Q3 which is half of what they will need to meet Q4 demand much less 2014 forward.

    • "No wonder nVidia skipped bidding on the console business."

      Anyone who believes or repeats this nonsense has absolutely no credibility and is a #$%$ moron. Nvidia COULD NOT COMPETE. They could not offer a full HSA platform in time for production because their CPU business is not there yet. Intel could not do it because their GPU business is not there yet.

      The ONLY company that could do it was AMD.

      No equivocation.
      No debate.

      The rest is just spin and #$%$.

      • 2 Replies to furphyharuspex
      • yourbestfriendintheworld yourbestfriendintheworld Oct 17, 2013 7:38 PM Flag

        The Chairman and CEO of nVidia says you're a liar. nVidia was Sony's first choice, but Huang balked at the price concessions Sony requested. AMD lowballed and won the contract after Sony grudgingly opened it up to them. The last thing Sony wanted was to be using the same chips Microsoft is using (actually the last thing they wanted was to be tied to AMD's famously bad operational execution and risk of disappearing before EOL of a major product line).

        So what you can take from this is that AMD is stuck providing costly chips at low prices for years. Possibly even after AMD ceases to be traded publicly. Sony may have to step in. But they won't be paying a premium on today's prices. They'll do it when AMD is crippled. Losses for every long.

      • Wrong. Sony and MSFT went cheap. An Intel CPU and nVidia GPU would have been far superior to the junky AMd chip they settled on. It'd just that unlike AMD who had already lost all of its other business to Intel and nVidia, Intel and nVidia would not offer their chips at thin margins. Given the pricing being offered by the console makers, only AMD was remotely interested in that business.

        No equivocation.
        No debate.

        And AMD's pathetic Q4 revenue growth shows exactly why Intel and nVidia were correct in avoiding this business. AMD wil swing back to losses in 2014. 1s are no more than 9 months away.

    • Sales rose 15% to $1.46 billion, above the company's July projection of $1.42 billion. Gross margin, an important data point in the semiconductor sector, widened to 35.7% from 30.9%.

      Good GOD man read the news

      Sentiment: Buy

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