AMD is maniacally focusing on returning to profitability in Q2 of 2008!
Posted by Jack Haddad on January 19, 2008 at 11:52 am
Team, AMD reported 4th quarter earnings last thursday. That said, There bevy reasons to be optimistic about its future prospects as the shares have been severely oversold.
CFO Robert Rivet said the company shipped “close to 400,000″ quad core units. That number is double that of the 1st quarter of 2007! Theyre continuing to execute their volume ramp of the quad core Barciloma chip. Executives were adamant that the errata problems with Barcelona were fixed. While 800,000 to one million units isn’t a massive jump, it’s a good start toward mass production.
I had the pleasure to speak with Derrick Meyer, Cheif Operating Officer. He stated that they got B3 material out of the Fab and that theyre putting it through its paces internally and in a couple of weeks they will be providing engineering samples to their customers and follow that quickly with production samples later in the quarter. Furthermore, they will be working with server customers to accelerate as best possible the availability of their systems and the marketplace. You’ll start to see that very late in Q1 and most of the systems early in Q2 and later into Q2.
Also, the company is very serious about becoming profitable again! In the fourth quarter, they achieved near breakeven at the operating line. They grew ASPs on the strength of new products. They managed costs well while growing the top line and they improved gross margin by three points, capping off an eight point gross margin improvement from a year ago. Theyre are maniacally focused on our return to profitability 2nd quarter of 2008!
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Hi Jack - good to hear these guys may return to profitability soon, as they have had a rough ride. However, one of the things I like to keep an eye on (especially lately) is leverage. It looks like AMD has a debt / equity ratio of almost 2X vs. 0.2X for its industry peers. What’s your comfort level on that metric? Thanks again.
AMD’s fundamentals are not a concern for me. Simply stated, AMD is INTC’s main competitor! That said, the ywill always glow on any news release being that theyre a small cap. I’m adamant that the shares cannot remain low like this for a long time.
That’s a good point - AMD’s market cap is only $4.4B vs. $117B for INTC. Yeah, and I’ve heard something about barriers to entry when it comes to making microprocessors