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

To: tejek who wrote (16741)	10/30/2000 5:05:16 PM
From: Charles R	Respond to of 275872

Ted, <Are you saying that Sanders did not say that during the CC? Maybe I misunderstood him but I thought he was projecting percentage revenue growth in the high single digits from Q3 to Q4. He may plan to have production of units up by more than ten % sequentially but like you said previously, he was not planning to sell all the Durons produced.> The problem is quite simple. The unit growth is expected to be north of 15% and the ASPs are supposed to be flat but the revenues are supposed to be up in high single digits. It basically means the management is not willing to give the right forecast except for an artificially low revenue growth number. <Charles, this is my original premise.... "If business is off only 5%, that could be enough for Intel to warn....and AMD too, if Sanders comments that Q4 was sold out were not true. " How is what you've said over the past 8-10 posts changed that premise? At this point neither of us know if business will be off 5% from the expectations held by both AMD and Intel at the time of their CCs. We probably won't know until near the end of the quarter. > The guidance is for 7.2Mu Athlon/Durons produced and 8-9Mu in sales between Athlon/Duron/K6s. 8Mu is ~16% unit growth and 9Mu is ~30% growth from Q3. All this apparently at flat ASPs. If so, the revenue forecast should have been for double digits (the unit growth forecast is 16-30% on the CPU biz; flash growth is also expected to be in double digits; there will be some unit slippage in chipsets but that is a small part of the business). The problem, clearly, is the current forecast does not make much sense. I am saying that business being down 5% miss does not matter. Since flash is truly soldout for the quarter, or so it sounded, a 5% miss should mean about 7-8% unit miss with relatively flat ASPs (which is the guidance) and by committing only to high single digit growth, a high single digit % unit miss is already built into the current revenue forecast. <Further its my contention that Sanders gave enough forward guidance during the CC that AMD will have to warn if business is, in fact, off by 5%.....even with him not saying that all pc chips were sold out for the quarter. Given the above, I am missing what our disagreement is about. > The disagreement is simply that I think the company did not give a meaningful forecast so there is no clear way of saying the forecast is not met. Where as your argument seems to be that the forecast is meaningful and can be measured against. In another sense the disagreement also extends to the reality of a 5% unit miss. When a company sets a large window like 8-9Mu it is tough to miss that. That is a 10%+ window! It is going to take abysmal performance (a very large unit and ASP miss) to miss the high-single digit revenue growth. I think the real forecast for Q4 has not yet been given and is the one that will come next week and I am betting that it will be UPBEAT from what it was a couple of weeks back. Chuck