twofowler:
"...As mentioned previously, revenues of $2.8 billion in '99 will be eclipsed by the $5 billion in Y2000 and the $7 billion in Y2001...A negative eps in '99 will be eclipsed by a minimum eps of $3.50 in Y2000 and probably $5.00 in Y2001
What about after 2001? Obviously eps will not continue to grow at that rate but how well will it do? I think even some people that think AMD will make a lot of money in 2000 worry about 2001 (because of the P4) or 2002 and later (because AMD does not have a good track record once you get past the last year or so)."
Comment: The tech industry, and in particular the flash and microprocessor segments have come a long way in the past 10 years, not unlike the Ford in its first 10 years...Within this fast changing environment, AMD has, in 1999, acquired a leadership role in both these market segments and is now positioned, as was Ford, with the best price/performance products in these to very young and fast growing segments...I just can't identify any company anywhere who is currently so well positioned in not one but two of the fastest growing markets anywhere...state of the art Dresden fab, superior products in top end flash, and now with the Duron making its way into the retail channels, the low, medium and high ends of the microprocessor markets...and what's more new and superior products upcoming to challenge the INTC stronholds in the workplace and server markets...It just doesn't get any better...Flash in the pan??? Have a look at the profits currently being generated and AMD is still in the trendsetting portion of the marketing curve with its awesome "spry Athy"...just doesn't happen in my experience that a company can generate such serious profits with a new product in the trendsetting stage...think about it...AMD's profitability went from neg. $0.62 to positive $0.43 in 99Q4 owing in no small part to the incremental shipment of 600,000 Athys (i.e. from 200,000 to 800,000). As microprocessor mix has shifted to a more heavily weighted "spry Athy", profitability has increased dramatically to $1.21 in Q2 after tax(...who'd have believed a year ago that AMD would be paying tax in Q2) and there is no reason to believe that this strong correlation between incremental shipments of "spry Athys" and eps growth rate is about to be violated to any serious degree owing to the fact that the "spry Athy" is only in its trendsetting stage and Dresden is only operating at 30% (?) capacity...It's absolutely perfect execution...What we are about to witness over the next couple of years at the minimum is the "spry Athy" in ascendency on the marketing curve and Dresden increasing capacity to accommodate the increasing market acceptance of the "spry Athy"...Yeah, I think Y2000 is going to post $5 billion in revenues and $3.50 in eps minimum (including communications sale)and Y2001 $7 billion in revenues and $5.00 in eps...Beyond that is anyone's guess but AMD is already planning to add additional flash and microprocessor capacity in order to enable expanding supply of its market leading product lineup...AMD just might be the current market's Ford of 80 years ago, IBM of 40 years ago or INTC of 20 years ago...So in answer to your query, yeah, I think AMD is in the initial stages of what will prove to be consistent long term revenue growth and consistent long term eps growth...well beyond Y2001...It has only just begun!!! |
