Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Joe NYC who wrote (115867)	6/14/2000 2:06:00 PM
From: Yougang Xiao	Read Replies (1) \| Respond to of 1572963

From Albert: ML on AMD 12:28pm EDT 14-Jun-00 Merrill Lynch (J.Osha (1) 212 449-0930) AMD ADVANCED MICRO:AMD on Track to Meet Expectations ML++ML++ML Merrill Lynch Global Securities Research ML++ML++ML ADVANCED MICRO DEVICES (AMD/NYSE) AMD on Track to Meet Expectations Joseph Osha (1) 212 449-0930 ACCUMULATE* Long Term BUY Reason for Report: Company Update Intermediate term opinion last changed on 05-Apr-2000. *The views expressed are those of the macro department and do not necessarily coincide with those of the Fundamental analyst. For full investment opinion definitions, see footnotes. Investment Highlights: o Our checks indicate that AMD is still on track to deliver sequential pretax earnings growth in the second quarter. o Our current (untaxed) earnings estimates stand at $1.18 for the quarter and $5.75 for the whole year, on revenue of $1.15 billion for the quarter and $4.93 billion for the year. o We are highly confident that AMD will meet or exceed these estimates. Fundamental Highlights: o We believe that concerns regarding the ability of the company's Taiwanese suppliers to adequately ramp core logic and motherboard supply are unfounded. o Also, our checks indicate that the transition to the new versions of Athlon is going well. o Finally, AMD will be taking a provision for income taxes beginning this quarter, which is not reflected in current estimates. We're not changing our numbers for now. The changed tax outlook is due to the better than expected results that AMD has been posting - we don't think that there should be any impact on the stock price. AMD On Track For The Quarter Our checks indicate that AMD is still on track to deliver sequential pretax earnings growth in the second quarter. Our current (untaxed) earnings estimates stand at $1.18 for the quarter and $5.75 for the whole year, on revenue of $1.146 billion for the quarter and $4.93 billion for the year. We are highly confident that AMD will at a minimum meet our estimates. We believe that concerns regarding the ability of the company's Taiwanese suppliers to adequately ramp core logic and motherboard supply are unfounded. Smooth transition for new Althon products We also believe that the transition to the new versions of Athlon (Duron at the lower end, and Thunderbird at the performance end) is going well. We expect AMD to top our 1.8 million unit K7 estimate for the quarter, and we also think that estimates of 3.1 million units for Q3 and 5.5 million units for Q4 are beatable as well. We expect to shortly see AMD beginning to utilize the performance headroom offered by the updated Athlon with on-chip L2 cache. Although initial versions of the product were only announced at speeds of up to 1 gigahertz, AMD should be exceeding that mark with Thunderbird early in the third quarter. Those products should be available in quantity, increasing pressure on Intel to roll Willamette in order to maintain its place in the clock speed war with AMD. Tax provision should have little impact on the stock Finally, it is important to note that AMD will be taking a provision for income taxes beginning this quarter, which is not reflected in current estimates. We're not changing our numbers for now, but if we apply a tax rate of 15% to the remaining three quarters, up from the 0% estimate we're using now, earnings per share declines to $1.01 for the current quarter and $5.08 for the year. The changed tax outlook is due to the better than expected results that AMD has been posting - we don't think that there should be any impact on the stock price.