Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 214.18

-0.5%

3:59 PM EST

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To: wbmw who wrote (237336)	7/27/2007 8:37:08 AM
From: Joe NYC	Read Replies (2) of 275872

wbmw, With such increased ASPs, let's say they make 45% gross margins, around their target. That's $968M in margin dollars. Subtract R&D and MG&A of $840M, and amortization of $60. Now we are down to $68M. Subtract $80M in interest payments, and now you are at a loss. Interesting exercise. The only thing I would differ is that at such high revenue, utilization and ASPs (close to or in 90s), the margins would likely be in mid to high 50s (across the product lines), with CPU margins ~60%. Under that scenario, AMD would be profitable, but probability of such scenario coming true is very low. Joe

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