Earnings Preview: Advanced Micro Devices

Jul.18.12 | About: Advanced Micro (AMD)

Advanced Micro Devices, Inc. (AMD) is scheduled to report its Q2 2012 results on July 19, 2012, after the bell. The street expects EPS and revenue of $0.07 and $1.41B, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from AMD and the news from its closest competitors.

Advanced Micro Devices, Inc. Revenue and Net Income History

Recent EPS Actuals vs. Estimates

The company has beaten analysts' estimates in the last four quarters. In the last quarter it reported $0.12 EPS, beating analyst estimates of $0.09.

Advanced Micro Devices, Inc. EPS Historical Results vs Estimates

The consensus EPS estimate is $0.07 based on 30 analysts' estimates, down from $0.09 a year ago. Revenue estimates are $1.41B, down from $1.57B a year ago. The median target price by analysts for the stock is $6.00.

Average recommendation: Hold

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On July 9, 2012, Jefferies & Company upgraded the company from Hold to Strong Buy.
  • On July 4, 2012, Sterne Agee downgraded the company from Buy to Neutral.
  • On June 26, 2012, Northland Securities initiated Outperform rating for the company.
  • On May 21, 2012, FBR Capital reiterated Outperform rating for the company.
  • On April 20, 2012, Barclays reiterated Equal Weight rating for the company.
  • On February 6, 2012, Longbow upgraded the company from Neutral to Buy.

Latest News

  • On July 11, 2012, Advanced Micro Devices, Inc announced that it was selected for an award of $12.6 million for two research projects associated with the U.S. Department of Energy's (DONE) Extreme-Scale Computing Research and Development Program, known as 'FastForward.' The DOE award provides up to $9.6 million to AMD for processor-related research and up to $3 million for memory-related research.
  • On July 9, 2012, Advanced Micro Devices, Inc. announced that for the second quarter of 2012, it expects revenue to decrease approximately 11% sequentially. The Company previously forecasted second quarter 2012 revenue to increase 3% , plus or minus 3% sequentially.
  • On June 29, 2012, Advanced Micro Devices, Inc. announced that for first quarter of 2010 it expects revenue to be down seasonally.
  • On June 26, 2012, Advanced Micro Devices, Inc announced that League Baseball's (MLB) San Francisco Giants selected AMD as a technology partner. The Giants have recently installed 66 new AMD A-Series Accelerated Processing Unit (APU)-based HP TouchSmart 320m All-In-One (AIO) touchscreen systems at AT&T Park, which will be followed by deployments of other AMD-powered systems throughout the organization.
  • On April 19, 2012, Advanced Micro Devices, Inc. announced that for second quarter of 2012, it expects revenue to increase 3%, plus or minus 3%, sequentially. The Company reported revenues of $1.59 billion in the first quarter of 2012.
  • On March 26, 2012, Advanced Micro Devices, Inc. announced Rockwell Collins has selected the AMD Radeon E2400 embedded graphics processor for inclusion in its integrated flight deck solution, Pro Line Fusion.
  • On March 23, 2012, Advanced Micro Devices, Inc. announced that it completed the acquisition of SeaMicro Inc., a pioneer in energy-efficient, high-bandwidth microservers, for approximately $334 million, net of cash assumed.
  • On March 5, 2012, Reuters reported that Advanced Micro Devices, Inc. has dumped its equity stake in GlobalFoundries Inc, three years after spinning off the company that makes most of its computer chips, in a move that frees it to strike manufacturing deals with other foundries.
  • On January 24, 2012, Advanced Micro Devices, Inc. announced that for the first quarter of 2012, it expects revenues to decrease 8%, plus or minus 3% sequentially. The Company reported revenues of $1.69 billion in the fourth quarter of 2011.

Competitors

Intel Corporation (INTC), Microchip Technology Inc. (MCHP), NVIDIA Corporation (NVDA), and STMicroelectronics NV (STM) are considered major competitors for Advanced Micro Devices, Inc. and the table below provides the key metrics for these companies and the industry.

Advanced Micro Devices, Inc. key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

AMD ChartClick to enlarge

AMD data by YCharts

Competitors' Latest Development

  • On July 10, 2012, Reuters reported that Intel Corporation will spend more than $4 billion to buy up to 15% of ASML Holding NV. Intel hopes to speed the adoption of the next generation of chip manufacturing processes from ASML by as much as two years.
  • On July 2, 2012, STMicroelectronics NV and Harbin Institute of Technology (HIT), a Chinese university, announced the opening of a joint laboratory to encourage innovation in electronics.
  • On June 28, 2012, STMicroelectronics N.V. announced that it has expanded its sensor portfolio with an ultra-compact, high-performance e-compass module. The integration of motion and magnetic sensing in a tiny 3x3x1mm package opens new possibilities for advanced navigation and location-based services in ever-sleeker portable consumer devices.
  • On June 26, 2012, STMicroelectronics N.V. announced that it is now delivering the first samples of its new STM32 F3 series of microcontrollers to OEM customers, enabling early evaluation of this new line in ST's product family featuring the ARMR Cortex-M core embedded.
  • On June 18, 2012, Eurotech SpA announced that it has signed an agreement with NVIDIA to expand the Eurotech Aurora supercomputer product line with new energy-efficient, high-performance GPU-accelerated systems.
  • On June 18, 2012, InterDigital Inc and Intel Corporation announced that certain of InterDigital`s subsidiaries have signed a definitive agreement to sell to Intel roughly 1,700 patents and patent applications for $375 million in cash.
  • On June 14, 2012, STMicroelectronics NV announced the introduction of the "Mystique" family of products, a high-speed active-protocol bi-directional converters for managing audio and video signals between DisplayPort and HDMI, two digital-display interface technologies used in computer and consumer electronics.
  • On June 13, 2012, STMicroelectronics N.V. and Wasion Group announced the availability of NFC-enabled post-pay power meters for deployment in the municipal grid of ChongQing, China.
  • On June 7, 2012, Phoenix Technologies Ltd., a company in UEFI firmware technology, products and tools, announced it has signed an agreement with Intel Corporation to be its collaborative partner for BIOS.
  • On June 4, 2012, Avanquest Software SA has announced having signed a collaboration agreement with Intel Corporation for the marketing of Avanquest Software's flagship titles on the Intel AppUpSM center in France.
  • On May 30, 2012, STMicroelectronics N.V. announced that during Annual General Meeting which was held in Amsterdam on May 30, 2012 it has approved the distribution of a cash dividend of USD 0.40 per share, to be paid in four equal quarterly installments, in June, August and December 2012 (November 29, 2012 in Europe) and February 2013 to shareholders of record in the month of each quarterly payment.
  • On May 25, 2012, Funcom N.V. (Funcom) announced that it is working closely with NVIDIA for Funcom's upcoming multiplayer online game, The Secret World. Funcom and NVIDIA's engineering teams have been working together to make The Secret World graphically advanced.
  • On May 14, 2012, NVIDIA Corp. and Intellectual Ventures announced that they have jointly acquired a set of patents developed and owned by IPWireless. The portfolio comprises approximately 500 patents granted and pending in the wireless communications area, including essential concepts in LTE, LTE-Advanced and 3G/4G technologies.
  • On May 11, 2012, NVIDIA Corp. announced that for second quarter of 2013, it expects revenue to be between $990 million and $1.05 billion. According to I/B/E/S Estimates, analysts are expecting the Company to report revenue of $978 million for second quarter of 2013.
  • On May 7, 2012, Intel Corporation announced that its board of directors has approved a 7% increase in the quarterly cash dividend to $0.225 per share ($0.90 per share on an annual basis), beginning with the dividend that will be declared in the third quarter of 2012.
  • On May 2, 2012, Cray Inc. announced that it has completed the previously announced transaction to sell its interconnect hardware development program and related intellectual property to Intel Corporation for $140 million in cash.
  • On May 2, 2012, Microchip Technology Inc and Standard Microsystems Corporation announced that Microchip has signed a definitive agreement to acquire Standard Microsystems Corporation (SMSC) for $37.00 per share in cash, which represents a total equity value of about $939 million, and a total enterprise value of about $766 million, after excluding SMSC's cash and investments on its balance sheet of approximately $173 million.
  • On May 2, 2012, Microchip Technology, Inc. announced that for the first quarter of 2013 it expects net sales of $349.1-$362.6 million and earnings per share (EPS) on GAAP basis between $0.40-$0.42 and on non GAAP basis between $0.47-0.49. According to I/B/E/S Estimates, analysts are expecting the Company to report revenue of $357.9 million and EPS of $0.48 for the first quarter of 2013.
  • On April 27, 2012, Aware, Inc. announced that it has signed an agreement for the sale of selected patents and patent applications to Intel Corporation for approximately USD75,000,000.00, subject to customary closing conditions and any required regulatory approvals.
  • On April 25, 2012, Reuters reported that Intel Corporation will ask Europe's second-highest court in July to scrap a EUR1.06 billion ($1.4 billion) EU antitrust fine, arguing regulators failed to prove it blocked a rival in their 2009 decision.
  • On April 24, 2012, Cray Inc. announced that it signed a definitive agreement to sell its interconnect hardware development program and related intellectual property to Intel Corporation for $140 million in cash.
  • On April 19, 2012, Reuters reported that Apple Inc, Google Inc, Intel Corp and four other technology companies were ordered by a judge to face an antitrust lawsuit claiming they illegally conspired not to poach each other's employees.
  • On April 19, 2012, Microchip Technology, Inc. announced the acquisition of Roving Networks (www.microchip.com/get/7KXS). Roving Networks is a privately held, fabless semiconductor developer of Wi-Fi certified transceivers and FCC certified Wi-Fi and Bluetooth modules.
  • On April 18, 2012, SeeNews - The Corporate Wire reported that the shares of Apple Inc, Visa Inc, Intel Corp, The Coca-Cola Company and Bank of America Corp can be traded on the Bucharest bourse as of April 18, 2012.
  • On April 17, 2012, Intel Corporation announced that for second quarter of 2012, it expects revenue to be $13.6 billion, plus or minus $500 million. The guidance does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after April 17. According to I/B/E/S Estimates, analysts were expecting the Company to report revenue of $13.4 billion for second quarter of 2012.

Technical Overview


The stock has a market capitalization of $3.42B and is currently trading at $4.88 with a 52 week range of $4.31 - $8.35. The stock's year-to-date performance has been -9.63%. It is currently trading below 20, 50 and 200 SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I am long NVDA.