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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (90418)	1/29/2000 6:33:00 PM
From: steve harris	Read Replies (1) \| Respond to of 1573857

GST, fwiw.............. the 12.5 number was from an analyst's report. ragingbull.com December Quarter Earnings Preview Salomon Smith Barney Friday, December 31, 1999 -------------------------------------------------------------------------------- --SUMMARY:--Advanced Micro Devices Inc--Semiconductors * Given the promising outlook for AMD's Athlon processor and a continuing strong Flash memory market, we are raising our Q4 EPS estimate from $0.00 to $0.11 and 2000 from $1.50 to $2.00. We are also raising our price target slightly from $32 to $35. * We now believe AMD shipped as many as 1.1 million Athlons in the quarter, higher than our earlier estimate of 950,000 units. We raised our 2000 forecast from 9 million to 12.5 million units. In addition, Flash demand remains very strong. Flash should present some upside to our present Q1 forecast of $224 million, up 15% sequentially. --EARNINGS PER SHARE-------------------------------------------------------- FYE 1 Qtr 2 Qtr 3 Qtr 4 Qtr Year Actual 12/98 EPS $(0.39)A $(0.45)A $0.01A $0.15A $(0.69)A Previous 12/99 EPS $(0.81)A $(1.10)A $(0.72)E $0.00E $(2.52)E Current 12/99 EPS $(0.81)A $(1.10)A $(0.72)E $0.11E $(2.62)E Previous 12/00 EPS $0.18E $0.28E $0.45E $0.59E $1.50E Current 12/00 EPS $0.28E $0.55E $0.55E $0.61E $2.00E Previous 12/01 EPS $N/A $N/A $N/A $N/A $N/A Current 12/01 EPS $N/A $N/A $N/A $N/A $N/A Footnotes: --FUNDAMENTALS-------------------------------------------------------------- Current Rank........:1S Prior:No Change Price (12/30/99)....:$28.43 P/E Ratio 12/99.....:N/Ax Target Price..:$35.00 Prior:32.00 P/E Ratio 12/00.....:14.2x Proj.5yr EPS Grth...:15.0% Return on Eqty 98...:N/A% Book Value/Shr(99)..:13.02 LT Debt-to-Capital(a)43.0% Dividend............:$N/A Revenue (99)........:2782.90mil Yield...............:N/A% Shares Outstanding..:149.5mil Convertible.........:No Mkt. Capitalization.:4250.3mil Hedge Clause(s).....:# Comments............:(a) Data as of the most recently reported quarter. Comments............: --OPINION:------------------------------------------------------------------ AMD groups itself into three major business units: 1) Computer Products Group (CPG) (63% of revenues) sells x86 microprocessors; 2) Communications Group (CCG) (about 12%) includes telephone network interface and Ethernet components; and 3) Non-volatile memory (about 25%) with Flash and EPROM memories (in a joint venture with Fujitsu). The company is seeking to divest itself of its communications components segment. We are looking for several positives going into the New Year. 1) AMD should continue to execute well in its conversion to a 0.18-micron process, which appears to be running slightly ahead of plan. This process generates 40-50% cost savings by reducing the Athlon die size from about 183 sq mils (0.25-micron process) to only 103 sq mils (0.18 micron). 2) We expect the Flash market to remain strong, at least in 1H, driven by demand for Cellphone code storage, PC BIOS code storage, and new networking applications. Both AMD and Intel are warning customers supply will be tight through much of the year. Year-end spot price declines for the 8Mb appeared to be the result of some short-term inventory workdown by at least one leading phone maker. While the pullback may represent a high-water mark for supply/demand tightness in Flash, spot prices are still 4-5x contract prices, and will not likely impact the market in 1H. There are some caveats for 2000. 1) Should Intel perceive AMD is once again a market share threat, it could sharply cut Pentium III prices. Given that AMD is now competing mostly in the PIII market, we believe Intel will be slower to slash prices in its primary earnings generator. 2) We have heard mixed reviews about Motorola HIP6 copper process AMD is now running in Dresden. We will have to monitor the ramp of Dresden to make sure it continues to come up smoothly.