Citigroup notes their field checks reveal that AMD (NYSE:AMD) sold socket 939 parts into US distribution in December at a deep discount. Production of 939 parts should fall from ~20% in 4Q06 to almost nothing in 1Q07, putting this transitional issue in the past.
December was weak for PC components as the supply chain worked through previously built Pre-Vista systems. The Taiwanese PC supply chain had steep M/M declines in December for chip sets, communications and motherboards.
1Q07 motherboard shipments are expected to be better than normal, declining only 3% vs. a normal decline of 7%. Solid motherboard builds could provide a catalyst for PCs with upside to CIR's forecast dependent on the uptake of Vista.
Citi is lowering their 4Q06E revenue and EPS to $1,781M/$0.23 from $1,820M/ $0.27 and 2007E to $8,382M/$1.16 from $8,464M/$1.24, but keeps Buy rating as risk/reward for shares of AMD shows $17 downside (based on 13.6x trough) and upside to revised price target of $26 (down from $27).
Notablecalls: Citi's late again. Check out the comments from ThinkEquity's Eric Ross from last week.
December was weak for PC components as the supply chain worked through previously built Pre-Vista systems. The Taiwanese PC supply chain had steep M/M declines in December for chip sets, communications and motherboards.
1Q07 motherboard shipments are expected to be better than normal, declining only 3% vs. a normal decline of 7%. Solid motherboard builds could provide a catalyst for PCs with upside to CIR's forecast dependent on the uptake of Vista.
Citi is lowering their 4Q06E revenue and EPS to $1,781M/$0.23 from $1,820M/ $0.27 and 2007E to $8,382M/$1.16 from $8,464M/$1.24, but keeps Buy rating as risk/reward for shares of AMD shows $17 downside (based on 13.6x trough) and upside to revised price target of $26 (down from $27).
Notablecalls: Citi's late again. Check out the comments from ThinkEquity's Eric Ross from last week.
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