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Advanced Micro Devices, Inc. Message Board

  • pessemist Jan 23, 2014 8:00 AM Flag

    Lets summarize

    1) AMD has lost PC market share. Baytrail is eating its lunch. Market share will continue tow rode this whole year.

    2) Management hinted they expect cash on hand to drop 20% next QTR. (#1.2b to $1B).

    3) Total outstanding debt went up.

    4) Management insinuated that margins will continue to fall (My guess, another 2% next quarter).

    5) Revenue is guided down quarter over quarter and only low percentage growth year over year.

    6) ARM-64 is on schedule. But so is Intel's Atom server offering which still uses the legacy X86 instruction set, ARM does not. Legacy systems will have no reason to switch to ARM. Also, there will be at least 5 or 6 ARM chips offered by competitors by that time.

    7) In my opinion, next quarter will have negative earnings.

    AMD has just had a Whole Body Scan Tuesday. They found spots of cancer in its Liver, Brain, Pancreas and left eye. In my opinion Shareholder Value is rapidly going to further erode. I think we'll see at least $3 /share in the coming weeks and probably worse.

    Take this information and use it as you will.

    Pess E. Mist

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • One thing I've noticed is people are overly pessimistic about a company until it actually turns around.
      Every time when a company is down in the dumps, you get the cookie cutter opinions of how the company needs to "pull a rabbit out of its hat", or "they face serious competition going forward".

      Pessemist puts a negative tone on things that don't need to be, and sometimes distort the facts.

      You picked up the part where the cash dropped to $1 bill, but you didn't pick up the part that it was used to pay GloFo to conclude the wafer agreement? They paid $200 to conclude 2013 wafer agreement. They satisfied 2013 wafer agreement with no penalties, and will satisfy 2014 as well.

      Only the short term debt went up by a measly $55 million. Overall, assets went up by $20 million and liabilities went down by $90 million.

      They said Margin will remain the same 35% next quarter - but you think it's gonna fall - OK that's your opinion.
      They didn't insinuate anything.

      Revenue is guided down quarter over quarter, and they only guide 1 quarter ahead so the future is unclear, and people are afraid of futures that are unclear.

      AMD just said they expected Revenue to be up year over year. It is purely Pessemist's interpretation that the growth will be "little". If you look at the current trend, Q3 2014 is up 37.6% YoY, and Q1 2015 is expected to be up 33.5% YoY. If they continue this YoY growth trend, obviously 2014 Revenue will be up ~35% YoY.
      So, shut yer trap.

      Regarding to ARM, it will be a slow transition, I can agree to that.

      Sentiment: Strong Buy

    • pesse I will agree with you on 1234 .....5 I don't agree with AMD will be 20-30 percent rev growth year over year...and that's not small ..also 6 could come back in bite INTC in the #$%$ there major customers are also there competitors if AMD can get it right with the arm server they will get droped left and right...7 I agree with

    • In case people needed a math lesson

      new number / old number - 1 = %change


      old cash= 1.2
      new cash = 1

      1/1.2 - 1 = -16.67%

    • 3.30 to 3.40 today

      Sentiment: Strong Sell

    • Let me put your summarization into context:

      1. Intel also lost market share not just AMD, the entire PC market share decline is taken into account in the CC guidance. AMD is diversifying
      2. Would you rather have AMD stock pile cash and not invest in future growth? This isn't a value company, cash expenditures are expected especially since this is Q1 it is ramping production up for new chip releases.
      3. Total Revenue and profits went up too.
      4. Management also insinuated a positive year that will break even rather than losing several hundred million.
      5. Revenue is guided down from Q4 to Q1, Even Intel will see revenue decline from Q4 to Q1, Seasonal cycles are expected.
      6. AMD will be leveraging its SeaMicro purchase as entry to concentrate in high density datacenters. Actually there is a noticeable push for ARM in the server arena especially by Google and some in Open Compute Project. If these major tech players decide to go with ARM architecture for server you can kiss Intel's server business good-bye.
      7. In your opinion? Seeing as how your opinion is negatively biased it should be a moot point. If you were truly neutral you would prevent facts for users to make their own decisions not on one-sided opinon pieces.

      • 3 Replies to guy1234567890_1999
      • Guy,

        with point 2 you have missed the entire reason why AMD forecasted a $200 million dropped in cash reserves. what you stated falls under operating expenses where revenues in the quarter are used to pay for R&D. Yes its hard to believe AMD could release as may new chips as they have and still continue to lower Operating expenses but that AMD for you.

        The reason why there will be a drop in capital reserves, AMD needed and have already paid GF $200 million in the first quarter of 2014. Instead of taking this payment out of their line of credit which would have increased debt by that $200 million, AMD choose instead to pay it out of cash on hand. thus lowering cash reserves by that $200 million. I am actually proud of AMD on this point since it is the first time AMD has not white washed an issue that will have an impact on the next financial report.

        not that you realized what had happened but most that have followed the disagreement in 2012 between GF and AMD know where that money went.

        By the way you do realize AMD's computer solutions groups report would have been much worse then it was if not for GF's forgiveness of Q4 2013 pay as you go agreement?

      • pessemist Jan 23, 2014 8:50 AM Flag

        'Just because other companies are experiencing the same troubles' Does not lift the obvious negative impact on AMD. The others are 800 pound gorillas who can easily absorb changing markets, AMD is barely making it. It can't absorb these things. AMD may be 'diversifying' but not by choice. It is a death race 2000 for AMD to generate revenue to replace PC revenue before the X86 is no longer a viable space for it. It is swapping high margin PC chips for low margin GPU business. As far as objectivity, you miss the entire point: I am SHORT because of my opinion, I do not form my opinions around the position of being a short. If I thought AMD was ready to grow in any sense of the wrod, I would cover and go long.

      • Fools aren't those who lose, but those who refuse to change their opinions.

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