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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Pravin Kamdar who wrote (2586)	7/28/2000 10:29:43 AM
From: niceguy767	Read Replies (1) \| Respond to of 275872

Pravin: Re: "How do you arrive at your earnings estimates for Q3 and Q4? I'm trying to use the sales numbers that AMD is projecting." Comment: Pravin: My numbers assume the projected figures of 3.6 and 7.2 million Athys as well...I pulled a JJ at SSB and performed a top down type of analysis to arrive at my numbers and tested the model against earnings since Q3 of '99, when Athy sales became material. Basically, since Q3, earnings after stripping out the Ireland property in Q1, correlate fairly strongly with the assumption that pre-tax eps increases at a rate of about $0.10 per incremental 100,000 Athys...If, true, and flash continues to contribute at same rate, which assumption, management indicates is safe, and if Athy ASPS remain fairly constant through Q3 and Q4 (and I don't see why not given the T-Bird thrust we are about to witness), then 1.8 and 3.6 million Athys will result in before tax eps increments of about $1.80 ($1.25 after tax )in Q3 and $5.40 ($3.75 after tax) in Q4 respectively compared to Q2 base of $1.21, resulting in after tax earnings as follows: Q1 $1.15 Q2 $1.21 Q3 $2.50 Q4 $5.00 Total Y2000 after tax = $9.86 Note 1: The above estimates do not include gain on sale of Communications division…As well, if Athy ASP's remain firm in Q4 and target of 7.2 million Athys is realized (we're told yesterday it remains realizable), Q4 earnings could well be higher than $5.00!!! Note 2: The $4.00 to $7.00 range that I have been comfortable with since January, and at that time seemed out of line to many is now looking exceedingly conservative in light of management comments yesterday…I am currently revising my Y2000 after tax estimate to fall within the $7.00 to $10.00 range…perhaps 6 months out, the $7.00 to $10.00 range will look conservative as well. Certainly Y2001 will be even more exciting as it is my view that AMD is just now exiting the starting gate!!!