Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 209.04

+0.7%

3:59 PM EST

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To: Mani1 who started this subject	8/30/2001 11:55:37 AM
From: AK2004	Read Replies (1) of 275872

Intel is likely to warn on Sept 6th it also seems that there was an intel inventory build-up in q2 after all. That is intel was stuffing the channels 10:14am EDT 30-Aug-01 Lehman Brothers (Niles, Daniel 415-274-5252) INTC INTC.N Intel Corp: Dell Increasingly Cautious On Asian PC Demand Today`s Date: 08/30/01 Ticker: INTC Fiscal Year: 12/31 Price: 28.1 52wk Range: 76 - 22 Rank(New): 3 - Market Perform Target(New): N/A Rank(Old): 3 - Market Perform Target(Old): 0 ----------------------------------------------------------------------------- EPS 2000 2001 2002 %Change Act. Old New St.Est Old New St.Est 2001/2002 1Q 0.36 0.16A 0.16A 0.16A 0.13E 0.13E 0.14E -56 -19 2Q 0.50 0.12A 0.12A 0.12A 0.14E 0.14E 0.15E -76 17 3Q 0.41 0.10E 0.10E 0.10E 0.17E 0.17E 0.18E -76 70 4Q 0.38 0.12E 0.12E 0.12E 0.22E 0.22E 0.21E -68 83 ----------------------------------------------------------------------------- Yr. 1.65 0.50E 0.50E 0.51E 0.65E 0.65E 0.68E -70 30 P/E 56.2 43.2 ----------------------------------------------------------------------------- MARKET DATA FINANCIAL SUMMARY Shares OutStanding (MM) 6,889.0 Revenue (B) 26.5 Mkt Capitalization (B) 193.6 Five-Year EPS CAGR 25.0 % Dividend Yield 0.3 Return On Equity (2001) - - Convertible No Current Book Value 5.33 Float - - Debt To Capital 3.6 % Disclosure(s) C, A ----------------------------------------------------------------------------- INVESTMENT CONCLUSION * Dell`s president of Asia-Pacific today talked about expecting IT spending cutbacks in the Asia-Pacific region to continue. We note that Asia-Pacific/Japan is only 10% of revs for Dell but is about 41% for Intel with growth rates over 10% better in this region relative to the total. SUMMARY * `As far as the second quarter goes, I can say with certainty that we`ve seen purse string tightening in the Asia/Pacific region` said William Amelio. `We think that the third quarter is going to be more of the same.` * He also thought forecasts by IDC for PC unit shipments for Q3 were overly upbeat. IDC forecasts A/P PC units of 5.61M (up 8% q/q) and Japan units of 3.29M (down 1% q/q). * We also have also heard that PC inventory started to accumulate in Q2 in A/P, especially China, and has continued to get worse in Q3 as sell-through has lagged optimistic build plans. Intel`s update on September 6th should be interesting given Sun, AMD and now this. 07:25am EDT 30-Aug-01 Lehman Brothers (Niles, Daniel 415-274-5252) AMD INTC Advanced Micro Devices: AMD Pre-announces; Waiting For INTC On Sept. 6th Today`s Date: 08/30/01 Ticker: AMD Fiscal Year: 12/31 Price: 14.20 52wk Range: 38 - 14 Rank(New): 3 - Market Perform Target(New): N/A Rank(Old): 3 - Market Perform Target(Old): 0 ----------------------------------------------------------------------------- EPS 2000 2001 2002 %Change Act. Old New St.Est Old New St.Est 2001/2002 1Q 0.57 0.37A 0.37A 0.37A -0.03E -0.03E 0.04E -35 - - 2Q 0.60 0.05A 0.05A 0.05A 0.03E 0.03E 0.09E -92 -40 3Q 0.64 -0.15E -0.15E -0.08E 0.16E 0.16E 0.15E - - - - 4Q 0.53 -0.03E -0.03E 0.02E 0.24E 0.24E 0.24E - - - - ----------------------------------------------------------------------------- Yr. 2.35 0.25E 0.25E 0.36E 0.40E 0.40E 0.53E -89 60 P/E 56.8 35.5 ----------------------------------------------------------------------------- MARKET DATA FINANCIAL SUMMARY Shares OutStanding (MM) 341.0 Revenue (B) 3.9 Mkt Capitalization (B) 4.8 Five-Year EPS CAGR 20.0 % Dividend Yield 0.0 Return On Equity (2001) - - Convertible Yes Current Book Value 11.16 Float - - Debt To Capital 25.7 % Disclosure(s) None ----------------------------------------------------------------------------- INVESTMENT CONCLUSION * Yesterday, AMD pre-announced an operating loss and that revs will decline 15% versus the prior range of 10-15%. We expected this and last Friday lowered our EPS from $0.35 to $0.25 for CY01 and from $0.80 to $0.40 for CY02. These remain unchanged. We note that AMD still has a month to go and Q3 is back-end loaded. SUMMARY * AMD cited that flash memory sales (26% of total revs) are expected to decline by 30% q/q or by $100M which is in line with prior guidance. PC processors is the issue with unit growth now expected to remain flat q/q at about 7.8M units. We believe that processor ASPs are below $70 versus hope of remaining flat at $75. * Both Intel and AMD are slashing prices aggressively in desktops and this will extend to portables in October. Both are trying to gain market share while PC demand continues to be disappointing. We note that Intel will provide guidance on September 6th and as we have stated before, estimates will have to come down.

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