Kurlak raised AMD's 99 earnings to $0.70 from 0, said AMD gained mkt shr at INTC expense
AMD profit view upped at Merill
cbs.marketwatch.com
By Krishnan Padmanabhan, CBS MarketWatch
Last Update: 1:29 PM ET Sep 17, 1998
Tech Report
SANTA CLARA, Calif. (CBS.MW) -- Advanced Micro Devices shares
climbed 6 percent Thursday as a key analyst's increased earnings estimate
sent the issue a lifeline while most tech shares sank amid global economic
fears.
Merrill Lynch's Thomas Kurlak, citing stronger
sales of the chipmaker's (AMD) core K6 II
product, raised his 1999 earnings estimates to 70
cents a share. Previously, the closely-watched
analyst expected AMD to break even.
Kurlak also pointed out that renewed demand was
fueling higher average prices on microprocessors.
At the same time, he said AMD is gaining market
share with 30 percent sequential unit growth in the
third quarter compared to 10 percent growth at
AMD's much larger rival Intel (INTC).
On Wall Street, AMD's stock rose 1 1/4 to 18
while Intel shares fell 1 15/16 to 83 1/8. However,
the Philadelphia Semiconductor Index edged up
0.5 percent.
The most glaring change at AMD was the 30
percent sequential increase in K-6 microprocessor
shipments to Hewlett-Packard (HWP), IBM (IBM), and Compaq
(CPQ). The estimated shipment increase in the third quarter and
subsequent expected increases in the fourth quarter should return the
company to profitability, Kurlak added.
For AMD, the addition of 3-D features in its chips is helping it stake out
ground in high-end PC market, dominated by Intel. In Kurlak's view, the
K6 outperforms Intel's Celron 300A and 333 MHz chips, which lack the
3-D component and aren't expected to incorporate the technology until
next year. |
