HQ:reits ST BUY,tgt $150
Date: 7/20/00
AMD 2Q: Solid Quarter; 2-for-1 Stock Split; Reiterate Strong Buy Rating
* AMD reported revenue of $1.17B, up 7.2% q/q beating our top line estimate
of $1.16B. Untaxed EPS for the quarter came in at $1.51, handily beating our
untaxed EPS estimate of $1.15. At a 20% tax rate in the quarter the taxed EPS
came in at $1.21. GMs were up 320 basis points q/q to 47.7% driven primarily
by increased shipments of high density flash memory products and a continually
improving MPU mix.
* We believe the company continues to successfully execute in both the primary
business segments - MPUs and Flash Memories.
* The company's commentary on its new Athlon products - Thunderbird and
Spitfire - continues to be very positive in terms of both the ramp and their
yields across the company's Al and Cu processes.
* The company's flash customers are demanding up to 50% more flash output than
they are currently getting per their respective contracts. In light of that
FASL (the joint agreement between AMD and Fujitsu) continue to be in a mode of
wanting to increase capacity as fast as they humanly can. The company now
expects that for the next 2-3 years the bit growth in its flash biz will
continue to grow over 100% y/y.
* During the June quarter the company's fab in Dresden contributed for the
first time to MPU revenues for the company. We expect this fab to get to a 50%
wafer starts capacity by this year end and then fully ramp to the 100% level
in terms of wafer starts by end of 2001.
* Starting the current quarter, the communications division revenues will
essentially go away since the division was sold recently to Francisco
partners. We are adjusting our top line numbers for the balance of this year
and next to reflect the lower anticipated revenues.
* We are thus lowering our top line numbers accordingly but are maintaining
our EPS numbers due primarily to improved gross margin expectations moving
forward.* We reiterate our strong buy rating and our price target of $150.
1999 A 2000 E 2001 E Q1 EPS $(0.81) $1.15A $1.18
Q2 EPS (1.10) 1.21A 1.22 Q3 EPS (0.72) 1.25 1.38
Q4 EPS 0.43 1.39 1.72 FY EPS (2.20) 5.00 5.50
FY REVS (M) 2,858 4,859 6,014 CY EPS (2.20) 5.00 5.50
CY P/E NM 18 16
FY Ends Dec Current Price $90.25
52-Week Range $15-97 Market Cap (M) $16,155
Shares Out (M) 179.0 Book Value 13.86
Cash/Share 7.65 P/S Ratio LTM 4.2
P/S Ratio FTM(E) 3.0
1Q:00 Product Revenue Breakout: Computation Products (MPUs and embedded
processors) were $667 million or 57% of 2Q:00 revenue up 4% q/q, Memory
Products (includes flash memory and EPROM) $362 million or 31%, up 11% q/q,
Communications (includes a variety of networking and telecommunications chips
for LANs, high density line cards, ADSL central office chipsets) $117 million
or 10% of revenues up 16% q/q.
Balance Sheet: The Company ended 2Q:00 with $1.08 billion in cash and
short-term investments, up from $919.2 million in the previous quarter.
Accounts receivables during the quarter were up by $125 million to $533
million in the quarter. DSOs came in at 38 days, up 8 days from last quarter. |
