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The Zacks Analyst Blog Highlights: Advanced Micro Devices, Sony, Microsoft, Intel and Potash Corp of Saskatchewan

Zacks Equity Research

For Immediate Release
Chicago, IL – November 12, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Advanced Micro Devices Inc. ( AMD- Free Report), Sony Corp ( SNE- Free Report), Microsoft Corp. ( MSFT- Free Report), Intel ( INTC- Free Report) and Potash Corp of Saskatchewan Inc. ( POT- Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Monday’s Analyst Blog:

AMD Launches Low-Cost Gaming GPU

In a bid to capitalize on the growing popularity of gaming devices, Advanced Micro Devices Inc. ( AMD- Free Report) recently launched a graphic processing unit (:GPU) — AMD Radeon™ R9 290 — the latest addition to the AMD Radeon™ R9 Series GPUs.

The AMD Radeon R9 290 graphics card is ideal for users who need superior graphic performance for gaming. Powered by AMD Graphics Core Next (:GCN) architecture, the new graphics card supports Mantle technology and provides strong graphics performance from web browsing to video editing.

Priced at $399, the new graphics card includes 2,560 stream processing units, 4GB GDDR5 memory, up to 5.0Gbps memory clock speed and 320GB/s memory bandwidth. Also, AMD’s GPUs support DirectX® 11.2, OpenGL 4.3 and Mantle, which give it the desired speed for optimal graphics solutions required in notebooks and desktops.

Additionally, AMD Radeon R9 290 graphics card features a new AMD TrueAudio technology, which gives enhanced sound effect for gamers through stereo headsets and speakers3. Consumers prefer an improved soundscape for gaming along with rich graphics. Thus, AMD’s revenues stand to benefit significantly if the latest GPU can cater to the rising demand of the users.

AMD’s processors have become highly popular among gaming console makers and will be used in Sony Corp’s ( SNE- Free Report) PlayStation 4, to be released on Nov 15 in the U.S. AMD’s processor has also been used in Microsoft Corp.’s ( MSFT- Free Report) new Xbox video game console, to be launched on Nov 22.

Gaming has become a focus area for AMD now. Both the next generation gaming consoles will feature AMD accelerated processing units (APUs), which will boost the company’s business. We believe that these wins have positioned AMD at the center of the console gaming industry and will lessen the company’s dependence on the declining personal computer market. It will possibly help the company to regain some of the lost market share from rivals like NVIDIA ( NVDA) and Intel ( INTC- Free Report).

A report from IDC estimates that there will be 257 million active consoles worldwide by 2015. These estimates suggest that there are opportunities for companies like AMD to increase their stakes.

The gaming hardware market is currently reeling under competitive pressure from emerging social networking sites and competing hardware platforms such as smartphones and tablets. However, we expect the hardware sales to increase because of the upcoming new consoles. Since AMD’s products are being used in all the major platforms, it should see good growth from the segment.

AMD is the world's second-largest maker of microprocessors. In the last reported quarter, AMD’s top-line numbers were better than its guidance, supported by the ramp up of semi-custom System-on-Chips, new products and strong mobile design wins. Also, the company’s bottom line beat the Zacks Consensus Estimate.  

Currently, AMD holds a Zacks Rank #3 (Hold).

Potash Down to Strong Sell

On Nov 8, Zacks Investment Research downgraded fertilizer company Potash Corp of Saskatchewan Inc. ( POT- Free Report) to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

Potash Corp.’s earnings of 41 cents per share for the third quarter of 2013, reported on Oct 24, were down 44.6% from 74 cents reported a year ago. Earnings also fell short of the company guidance range of 45 cents–60 cents per share. The results, however, were in line with the Zacks Consensus Estimate.

Potash Corp. posted a profit of $356 million in the reported quarter, down roughly 45% from $645 million recorded in the prior-quarter. The decline was mainly attributed to weaker prices for all three nutrients – potash, nitrogen and phosphate – and lower potash sales volumes.

Sales came in at $1,520 million in the quarter, decreasing 29% from $2,143 million registered a year ago. It missed the Zacks Consensus Estimate of $1,552 million. The reduced sales were primarily due to lower-than-expected potash sales volumes in the quarter-end as buyers delayed purchases owing to near-term market uncertainty.

The market for all three nutrients-potash, nitrogen and phosphate remained challenging in the third quarter and weighed on the long-term fundamentals of the company. Potash Corp. suffered when Russian firm Uralkali left the potash cartel (Belarusian Potash Company) and announced that it would aim to boost market share, leaving buyers anticipating weaker prices.

Potash Corp. also faces challenges in India, a key market. Although contracts with major suppliers run through Mar 2014, weak domestic demand due to reduced government subsidies and currency weakness could result in lower shipments and price fall.

Following the third-quarter earnings release, the Zacks Consensus Estimate for 2013 for Potash Corp. dropped 12.7% to $2.13 per share. Similarly, the Zacks Consensus Estimate for 2014 has decreased 12.8% to $2.11 per share.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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