Replies to post #5614 on Advanced Micro Devices Inc (AMD)

[KeithDust2000]

fnf, I disagree. Read this:

Analyst Sees Troubled Times for AMD
By Meredith Derby
Editorial Assistant
06/02/2003 11:14 AM EDT
URL: http://www.thestreet.com/tech/marketmovers/10090845.html




Concerns about semiconductor company Advanced Micro Devices (AMD:NYSE - news - commentary) were coming from a Banc of America analyst Monday morning.

The company's battle for market share against rival Intel (INTC:Nasdaq - news - commentary) is heating up, and second-quarter results are, so far, lower than expected, analyst Sumit Dhanda wrote in a research note.

"We believe AMD will continue to face an uphill fight in its battle to gain, or even maintain, market share against Intel," Dhanda wrote. Citing weak motherboard shipment data and an aggressive pricing environment, Dhanda downgraded the company to sell from neutral, and the analyst reduced AMD's full-year 2003 and 2004 earnings estimates.

Intel is trying to regain lost market share in flash memory, Dhanda said. Even though Intel reversed its recent price hikes, which had caused customers to move flash orders to alternative suppliers, including AMD, the increase in orders may soon be overturned.

"Intel has recently cut its flash prices and avowed its determination to recapture lost market share," wrote Dhanda, who said competitive pressure in the mobile processor market has also increased.

Additionally, AMD's white-box/clone market, which consists of 40% of its processor unit shipments, is currently experiencing softness, the analyst indicated. Dhanda estimated motherboard shipments will fall by 15% in the quarter, and pointed out that the second quarter is usually seasonably weak for AMD.

To top it off, "PC processor price cuts have been far more aggressive in the second quarter," Dhanda said, which has forced AMD to reduce prices on its Ahtlon-XP processors two times this quarter.

On average, Wall Street analysts expect AMD to post second-quarter sales of $727 million. Banc of America expects $691 million. The company had revenue of $715 in the first quarter and said it expected second-quarter sales to surpass that amount.

Dhanda widened AMD's full-year 2003 loss estimate to a $1 a share from a loss of 89 cents, and lowered the price target on the stock to $5 from $7. The brokerage currently rates the semiconductor sector underweight.

Shares of AMD, Sunnyvale, Calif., were down 13 cents to $7.15 in recent trading on the New York Stock Exchange.

http://www.thestreet.com/pf/tech/marketmovers/10090845.html

It feels like the analyst copied my own observations, which were exactly the same. I´m not predicting specific numbers, but I´m sure that these factors will very well affect the results in a negative way.