Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Goutam who wrote (82505)	12/9/1999 2:34:00 PM
From: Charles R	Read Replies (2) of 1572372

Goutama, <How would you like me to enter your estimates into the contest? I think, I will make two entries for you - "Charles R - hi" and "Charles R - lo". > That sounds fine though I find it likely that AMD will comeup with a updated guidance that will make things a little easier. <Please let me know of your prediction for the stock closing prices(day after the EPS announcement) - Lo as well as High.> Since AMD is going to be pretty solidly in profits for the next 12 months or so, I thought I would take a hack at 2000 earnings and give a multiple of 20 to 2000 estimates (this, IMHO, is extremely conservative) nowadays folks use multiples of 2001 earnings but in case of AMD you can't get that number without a level of guess work that makes the task ridiculous. To get the 2000 numbers I made the following assumptions: - AMD keeps the low-end units roughly constant for year 2000 at about 4-5Mu per quarter - grows high-end/business units at a rate of approx 1Mu per quarter - Dresden ramp begins early Q2 - Networking group is sold in Q2 - Flash stays at ~1B run rate for the next 12 months - AMD starts paying taxes at about 40% rate starting Q2 - Assumed $50M in incremental depreciation every quarter for each quarter of Dreden ramp (don't know if this is in the ball park but can't do any better without better guidance on the ramp logistics. If someone knows more on this please feel free to comment) - Since the earnings variability is LARGE depending on Athlon units and ASPs, I took the low-end numbers With the above notes, I come up with $3 in earnings for year 2000. Putting a x20 multiple gets to $60. So, I predict that the stock will hit $60 if not on the earnings day, sometime between Q4 and Q1 earnings announcement. Chuck

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