Earnings Preview: Advanced Micro Devices

| About: Advanced Micro (AMD)

Advanced Micro Devices (NYSE:AMD) is expected to report Q2 earnings after the market close on Thursday, July 15, with a conference call scheduled for 5:00 pm ET.


The consensus estimate is 6c for EPS and $1.55B for revenue, according to First Call. Some believe or hope, AMD's commentary should affirm rival Intel's (NASDAQ:INTC) characterization of the business backdrop for chip makers as robust. AMD has seen its shares take a beating this year with its shares down more than 24%, as it wrestles with stiffer competition from Intel and broader worries about a weakening tech market. Guidance provided by management on its last earnings call was for Q2 revenue to be "down seasonally". Revenue reported in AMD's Q1 was $1.57B.

Analyst Views

Auriga USA's analyst Daniel Berenbaum believe "Intel's gain is likely AMD's pain." Berenbaum argued that Intel is "a product cycle story, with revenue growth and gross margin upside driven by a Nehalem-based server refresh." AMD, Berenbaum predicted, "is likely to disappoint on a relative basis when it reports Q2 results." He says, trends point to "sub-seasonal growth in desktop and mobility," which he said hurts AMD. He also cited what he called a lackluster position in the server market. Berenbaum believes AMD's competitive positioning in servers is weak, and that the company is likely missing a refresh cycle due to the move to the cloud. Berenbaum noted that, on a relative basis, "AMD will likely show lower revenue and profitability than Intel because of this."