SCUM bria - Here's some information that you can just "Blow Off" !
S&P cuts AMD outlook to negative .
Here are some highlights:
"The revised outlook reflects the company's diminished production levels in the face of heightening competitive price pressures. "
"The company has yet to achieve its target $100 unit price while competitor Intel Corp.'s average price remains in the $200 area due to its high-end server microprocessors. "
" Furthermore, Advanced Micro Devices' prospects remain challenged by Intel's rapidly proliferating product line, aggressive pricing policies, and substantially greater balance sheet strength.
In addition to these challenges Intel's R&D, marketing, and manufacturing prowess also represent significant pressures. Advanced Micro Devices' other product lines continue to face difficult market conditions. "
"The company has a $125 million term loan repayment during 1999. "
Sheesh - no limo rides for a week for Cherry Sanders !
Paul
{====================================} newsalert.com
April 08, 1999 17:19
S&P cuts AMD outlook to negative
Jump to first matched term
(Press release provided by the rating agency)
NEW YORK, April 8 - Standard & Poor's today revised its outlook on Advanced Micro Devices Inc. to negative from stable and affirmed its single-B' bank loan and corporate credit ratings on the company.
Standard & Poor's also affirmed its triple-C-plus rating on the company's subordinated debt.
Ratings on Advanced Micro Devices reflect the company's challenges in executing its business plan in a very competitive market.
Sunnyvale, Calif.-based Advanced Micro Devices manufactures Windows-compatible personal computer microprocessors and other semiconductors.
The revised outlook reflects the company's diminished production levels in the face of heightening competitive price pressures.
Advanced Micro Devices exceeded its 1998 planned "K6" microprocessor volume levels, yielding a good market share in the low-priced PC market segment.
However, its efforts to manufacture high speed versions have impacted its productivity, while pricing pressures have increased.
The company's average selling price in the quarter ended March 1999 has been estimated at $78, compared to $88 in the quarter ended December 1998, while March quarter output volumes are expected to be 20% below plan.
The company has yet to achieve its target $100 unit price while competitor Intel Corp.'s average price remains in the $200 area due to its high-end server microprocessors.
The company faces the steepening technical challenge of rebuilding production volumes while pushing chip speeds upwards.
Advanced Micro Devices must also successfully introduce its next generation "K7" in June 1999 and later ramp production of that device in its nascent Dresden, Germany factory.
Furthermore, Advanced Micro Devices' prospects remain challenged by Intel's rapidly proliferating product line, aggressive pricing policies, and substantially greater balance sheet strength.
In addition to these challenges Intel's R&D, marketing, and manufacturing prowess also represent significant pressures. Advanced Micro Devices' other product lines continue to face difficult market conditions.
After material net losses from operations in the first half of 1998, the company reached break-even profitability in the quarter ended September and was modestly profitable in December.
However, due to the cited production problems, March quarter revenues are expected to be about $630 million, compared to $789 million in the December 1998 quarter, resulting in a large net loss.
Free cash flows have been substantially negative in the last few years, and net debt increased by $500 million during 1998.
Debt to earnings before interest, taxes, depreciation, and amortization was about 4.5 times in 1998. Cash balances of $600 million at Dec. 31, 1998, are supplemented by $150 million availability in its revolving credit agreement. The company has a $125 million term loan repayment during 1999.
OUTLOOK: NEGATIVE
The company continues to face stringent operational challenges in an unforgiving competitive environment, Standard & Poor's said. |
