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

To: kash johal who wrote (30921)	3/9/2001 3:41:54 AM
From: Petz	Respond to of 275872

kash, re:"I think CPU market inventory is not too bad - maybe 12 weeks or so" This is the most off-the-wall statement you've made so far. NO Tier 1 OEM's buy CPU's and put them on the shelf. Do you really think Compaq buys CPU's weeks in advance? AMD said in Q4 CC We actually ended last quarter with only a few weeks of inventory which is what we need to service our customers. So if OEM's had 2 weeks of inventory at the end of Q4 and AMD had 3 weeks of inventory, how do you suppose that inventory grew to 12 weeks in 10 weeks time? On Tuesday, AMD said they still expected flash to grow 30-35% for the year in $'s. That is a drop from what they said in the Q4 CC, where they said, "We expect the revenue growth in 2000 [sic, 2001] for AMD Flash products to be in the 40% range." That means they've shrunk their revenue projections for flash from $ 2,194M to a range of $ 2,037M - $ 2,115M, a reduction of between $79M and $157M. Since the overall revenue projection made in January was 7-15% growth to 4,969M - 5,341M, we can safely assume that $4,969M is the level of 2001 revenues necessary to produce earnings of $2.00 per share fully taxed. This means that AMD's expected CPU revenues for Y2001 at the middle of January were a minimum of 4969-2194, or $2,775M. Eight weeks later, right now, AMD must be expecting that CPU revenues for 2001 will be between $2,854M and $2,932M, an increase of 3 to 6 percent over previous projections. To make that big a change in revenue projections for the entire year based on 8 weeks of results is incredible. Actually, the CPU business must be going even better than that, because I ignored foundry services revenues, which are likely to shrink in this environment. So, unless Hector made an emBarretting statement about the $2.00, I think Q1's CPU revenues will come in ahead of plan. EDIT - just realized that AMD could reach $2.00 EPS with 5-10% lower flash even if CPU revenues didn't go up higher than projection by buying back 3-6% of the stock, but even so, the CPU biz is not doing worse than expected. Petz