Wednesday, April 12, 2006

Earnings and conference call

Recent update (today 4:46pm)

The official data here

$0.38 EPS, beating consensus ($0.29) by 30%; this can't be possibly "priced in", therefore, other things being equal, this justifies a jump of 30% over the prices after Q4 earnings, you do the math, I don't want to be accused of pumper.

Gross Margin Increased from 57.3% to 58.5%.

ASP up thanks to desktops and mobiles, Operons units up a lot (penetration in server space)

Guidance: flat. Conservative according to management and everybody else. Therefore, huge potential for upswings. Will Intel commit suicide by giving away its processors in a futile attempt to keep AMD from selling theirs? Remember that AM2 and Turion x2 are in store for this quarter, as well as the Analysts meeting, that could unveil "products and technologies that will put the competition in a reactive position", or something like that. It could be quadcores, zram roadmap, who knows what at 65nm, a new invention from the Grand Masters...

Management confirmed that long term projects are well on schedule.

Very lean inventories, demand for the highest end surpassed supply at times

They refused to say what percentage of production will come from Chartered while asked about the dramatic production increases reported (but Management didn't denied the increases either), so, we don't know how much it could be.

And R&D has grown a lot, the company believes so much in its future that it wants to keep being an attraction pole for top flight talent.

Where these positive news?: yes, very positive. But I am disappointed. Should this stock be at $35? no, but Wall Street doesn't want to give AMD the stock price it deserves based on forward guidance.

Is it in any financial, commercial, technological jeopardy? not at all, so you may roll over your options to shares.

Quarter GAAP
non cash charge

Year EPS
Q2 06 0.38 0.38

Q1 06 0.38 0.38
Share Price 31.8

Q4 05 0.45 0.21

Q3 05 0.23 0.23
1.44 1.2 Est. Q2 22 27
Q2 05 0.09 0.09
1.15 0.91 Now 28 35
Q1 05 -0.04 -0.04
0.73 0.49 Q4 05 38 56
Q4 04 0.12 0.12
0.4 0.4 Q3 05 95 95

This table tell us that we are trading at 28x P/E. I got into AMD at 100x P/E.


Anonymous said...

For a complementary look atthe issue see:

Love or hate "The Register" guys, at least their style is refreshing.

Anonymous said...

And one day latter, the stock price dropped...