Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 207.67

+2.2%

3:59 PM EST

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To: ChrisBBo who wrote (214750)	10/24/2006 6:33:10 PM
From: niceguy767	Read Replies (2) of 275872

The precipitous decline in AMD's gross margin in Q3, although not totally unexpected given X2's high cost of production at 90nm, did blindside me. Had Q3 margins held the 55% to 60% range, AMD would have posted $0.40 eps and AMD price would now be $35...Woulda, shoulda, coulda! Management assured analysts that 2 points of the margin would be recovered in Q4 by reversing Q3 inefficiencies. The HUGE question for Q4 remains whether or not richer mix of laptops and servers, thanks to Dell, combined with any 65nm cost savings will enough to recapture 55% to 60% gross margins. The market, so far anyway, isn't buying any significant gross margin recovery in Q4...but, the market has been known to be wrong on occasion!

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