AMD Concerns - Lehman

Lehman’s Tim Luke this morning trimmed his price target and EPS estimates on Advanced Micro Devices (AMD), on greater-than-expected market share loss in the “value desktop” and high-end server segments, and concerns about the company’s exposure to the U.S.-led consumer economic downturn. He says there are risks to the company’s guidance that the March quarter would be seasonal, which would be down 7% sequentially at the top line.

Luke says discussions with Asian PC contract manufacturers and component vendors suggest “incremental ASP pressure” for AMD given the absence of a high-end server/desktop offering.

For Q1, he now see a loss of 36 cents a share; he had been expecting a loss of 34 cents. Luke trimmed his 2008 EPS estimate to a loss of $1.03 a share, from a loss of $1. For 2009, he now sees a loss of 54 cents, rather than a loss of 52 cents. His price target goes to $8 from $9. Luke maintains his Equal Weight rating on the stock.

Nonetheless, AMD today is up 21 cents (as of 1:38 p.m. EDT), at $6.44.