- Bear Stearns comments on AMD (NYSE:AMD) after ATI announced that it expects Aug-Q revenues to come in around $520M, which is significantly below their 6/29 guidance of $620-$660M.
The impact to firm's AMD pro-forma revenue and earnings is minimal as they had already anticipated a significant decline in Intel-based chipset sales in their prior forecast which is somewhat offset by growth in the merged company's AMD-based chipset revenues. Also the inventory adjustment in handhelds for ATI should not extend into 2007. Therefore their 4Q06 pro-forma EPS estimate, excluding acquisition related intangibles, is only lowered by a penny to $0.35, while 2007 pro-forma EPS estimate is unchanged at $1.70.
The sell off in AMD's shares after market represents a buying opportunity. As the firm said earlier, the revenue shortfall in Intel-based chipset business implies further processor share gain by AMD against Intel. Additionally, AMD is seeing considerable upside in MPU unit shipments for 3Q and 4Q, particularly for notebooks and because of this strong demand is clearly being more selective in taking on low margin business. Firm's 3Q and 4Q EPS estimates (for AMD stand-alone) at $0.30 and $0.46, respectively are well above consensus of $0.23 and $0.32, respectively.
Maintains Outperform.
Notablecalls: AMD traded close to $23 in after mkt. Bear Stearns is not the only firm telling investors to buy the weakness. This, combined with comments from JP Morgan (see below) may produce a bounce. AMD is eating INTC's lunch after all.
The impact to firm's AMD pro-forma revenue and earnings is minimal as they had already anticipated a significant decline in Intel-based chipset sales in their prior forecast which is somewhat offset by growth in the merged company's AMD-based chipset revenues. Also the inventory adjustment in handhelds for ATI should not extend into 2007. Therefore their 4Q06 pro-forma EPS estimate, excluding acquisition related intangibles, is only lowered by a penny to $0.35, while 2007 pro-forma EPS estimate is unchanged at $1.70.
The sell off in AMD's shares after market represents a buying opportunity. As the firm said earlier, the revenue shortfall in Intel-based chipset business implies further processor share gain by AMD against Intel. Additionally, AMD is seeing considerable upside in MPU unit shipments for 3Q and 4Q, particularly for notebooks and because of this strong demand is clearly being more selective in taking on low margin business. Firm's 3Q and 4Q EPS estimates (for AMD stand-alone) at $0.30 and $0.46, respectively are well above consensus of $0.23 and $0.32, respectively.
Maintains Outperform.
Notablecalls: AMD traded close to $23 in after mkt. Bear Stearns is not the only firm telling investors to buy the weakness. This, combined with comments from JP Morgan (see below) may produce a bounce. AMD is eating INTC's lunch after all.
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