AMD Could Whiff Its Quarter - JPMorgan

J.P. Morgan’s Christopher Danely this morning warned that Advanced Micro Devices (AMD) is likely to report Q1 revenues below company guidance calling for a “seasonal” March quarter.

Danely now sees the company losing $1.40 a share this year, compared with a previous estimate of a loss of $1.32. For 2009, he expects a loss of $1.20, versus a previous forecast of a loss of $1.10.

Danely says AMD is losing share to Intel (INTC) in the quarter; he says Intel is benefiting from “superior product offerings” and AMD’s lack of high-end server processors. He also thinks AMD could be hurt by microprocessor inventory in the channel, noting that CPU unit shipments have been well above long trend for the past two quarters. Not least, Danely says pricing is weak for AMD.

Says Danely: “We believe it will be difficult for AMD to make money unless it drastically cuts back production and focuses on execution.”

AMD today is up 2 cents at $5.93.

Comments

[AmesTiedeman]

AMD at these levels is a joke. Let it go even lower and then buy. The dream turn around would be if it fell under $2.00!

I fully believe AMD will survive and thrive over the next 5-7 years. Can you say NEW PRODUCTS? EACH TIME THEY SAY AMD IS DEAD IT COMES BACK. THIS HAS BEEN THE CASE SINCE AT LEAST 1988. IT IS NOT OVER AND IT WILL NOT BE OVER THIS TIME EITHER...

[ffakr]

AMD's new products are here now. Intel is a full design cycle ahead of AMD and their aggressive Tick-Tock strategy means AMD is as good as dead unless they reinvent their business.

There are a lot of zealots in the processor wars, and I'll admit I used to root for AMD myself but the facts are more than clear. Lets look at the facts shall we?

Processors:
AMD has been behind Intel since the release of the Intel Core2 line. Intel has been killing AMD on power while staying ahead of them on performance.
As Core2 aged, AMD made some headway in the area of performance/watt but this was not due to processor advances but rather due to the hot system controllers in Intel systems.
AMD had an opportunity to catch up with Phenom but AMD's release window was blown when Phenom blew it's release date.

When Phenom did come out it was clocked lower than expected, performed worse than expected, and contained performance robbing errata that was just fixed THIS PAST WEEK! Hey, but at least AMD finally made 65nm fabrication with Phenom. Too bad the 65nm Core2 processors were killing Phenom in all but the rarest of benchmarks.

In the same time frame:
Intel released an inexpensive Quad core chip ahead of Phenom.
Intel released a revised series of dual and quad core chips on their next die shrink, the 45nm process reducing cost and heat while increasing performance.
Intel's new 45nm chips include some modest performance improvements/clock cycle except for Media applications (video in particular) where the new chips beat AMD processors by 50%.
45nm Core processors overclock to 4GHz with air cooling indicating Intel is holding back to keep just out of reach of AMD. Intel could crush AMD in all but the lowest cost markets if they pushed the 45nm Core clock speed all the way. Phenom, on the other hand, overclocks extremely poorly.

Processor future, this year:
Intel's 45nm process is robust. Intel is looking at a core revision later this year with a significant core reworking.
While AMD is poised to release their 3 core cpu, Intel is talking about a 2H 6-core and later a 4Q 8-core cpu with (wait for it)... another core revision bringing a new on-die memory controller 1H next year.

Video Cards, ATI [AMD] v. Nvidia:
NVIDIA has been ahead of ATI for well over a year. Their product release cycles were 9 months ahead of ATI and although the 9xxx series Nvidia cards are mostly an incremental upgrade to the 8xxx series, Nvidia is the performance leader and they will be the first with the next major revision.

DRAM/SRAM:
Oh yea, what about AMD's memory production? Memory is a loss leader. Vendors are almost giving it away these days.

AMD is only alive today because it's against Intel's interest to kill them. Intel needs one vaguely viable competitor to prevent serious accusations of Monopoly.
AMD pulled a fantastic rabbit out of the hat when they absorbed the Alpha processor design team and the result was the Athlon. Athlon saved AMD. Unfortunately, the hat is empty. Phenom was the next rabbit AMD needed to save AMD from the Intel Core design (and Intel's next processors) but Phenom is a failure. Phenom is rarely competative with Core.. only through extremely selective benchmarking. Core beats Phenom in nearly any benchmark, and Intel hasn't begun to tap the performance potential of the current 45nm chips.

The next time we'll see a significant uptick in AMD stock is after the hostile take over.. of course they'll probably wipe out your holdings in the process.

[Gumby]

We are too quick to forget that AMD had grabbed as much as 25% of the market at its most recent peak up from 5% right before AMD introduced Athlons and Opterons. Naturally, Intel fought back after several years of its back on the wall. At last count, AMD still commands 15% of the market as it is now working on integrating its recent big acquistion of ATI that makes graphic cards and tuners. As you should know that graphics is a bandwidth hogging feature even with help of graphic cards with own chips on them. AMD will be the forerunner in revolutioninzing the experience of computing with superior graphic advancements that will floor Intel for another round of its back on the ropes all over again. AMD is not seeking the most profitable means of producing chips, AMD is happy with decent profit returns as contrary with Intel which cant afford to look for less than 50% profit on each average chip it makes. Intel is straitjacketed in this manner and its innovation pursuits is limited on the most profitable ones they can get on. AMD is free to make any kind of chip it think it can to grab market share regardlessly. I am eagerly looking forward to the inevitable coming next generation of eye popping chips that will combine graphics and central processing features. Next, AMD might buy Creative for sound cards and mesh them into chips . AMD works hard to give you the best chips your money can buy....with profits that AMD needs to keep up with the innovations ahead...

[Gumby]

We are too quick to forget that AMD had grabbed as much as 25% of the market at its most recent peak up from 5% right before AMD introduced Athlons and Opterons. Naturally, Intel fought back after several years of its back on the wall. At last count, AMD still commands 15% of the market as it is now working on integrating its recent big acquistion of ATI that makes graphic cards and tuners. As you should know that graphics is a bandwidth hogging feature even with help of graphic cards with own chips on them. AMD will be the forerunner in revolutioninzing the experience of computing with superior graphic advancements that will floor Intel for another round of its back on the ropes all over again. AMD is not seeking the most profitable means of producing chips, AMD is happy with decent profit returns as contrary with Intel which cant afford to look for less than 50% profit on each average chip it makes. Intel is straitjacketed in this manner and its innovation pursuits is limited on the most profitable ones they can get on. AMD is free to make any kind of chip it think it can to grab market share regardlessly. I am eagerly looking forward to the inevitable coming next generation of eye popping chips that will combine graphics and central processing features. Next, AMD might buy Creative for sound cards and mesh them into chips . AMD works hard to give you the best chips your money can buy....with profits that AMD needs to keep up with the innovations ahead...