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

To: mas_ who wrote (147226)	1/10/2005 11:34:34 PM
From: neolib	Respond to of 275872

On 12/16/04 I posted this: Hi niceguy767 I been long since the mid 7's, but have dumpded about 1/2 my shares now (I've been way to heavily into AMD as it was anyway). Stayed in partly due to your cheefleading <vbg> I'm getting a little nervous about Flash. Recently we have had the following three comments: 1) AMD hinting that they might be willing to start to begin to think about selling the division. 2) Intel backpeddling from the comms profitability for 2005, with comments about a tough environment. 3) Continued comments about the Flash industry in general such as we saw yesterday (even if they are confused comments). Last Qtr, AMD did not see fit to hint early that FLASH was in such major trouble. If AMD saw another 100M wacked from FLASH this quarter things could be very dicey with the stock in the mid 20's. The implosion in FLASH, given a generally technically competitive product is worrying. AMD will have gone from FLASH being > 1/2 of revenue to something like 1/4 of revenue in a short period of time. Analysis's will point to that as typical AMD performance, and something that is likely to happen to the processor group in late 2005 or early 2006 when Intel has their act together again. Doug replied with some numerical estimates as he saw it: I think a drop of 100M this Q is extremely unlikely, but even if you want to entertain that, you should correct for AMD 60% ownership of Spansion. Looking at Q2, then: 673M * .6 = 403.8M vs. 554M CPG vs. 34M other In Q3: 538M * .6 = 322.8M vs. 673M CPG vs. 29M other Let's take your doomsday flash scenario for Q4, and assume 800M for CPG: Q4-hypo: 438M * .6 = 262.8M vs. 800M CPG vs. 30M (say) other Q4-guidance: 322.8M vs. 800M vs. 30M Q2: flash 40% revs Q3: flash 31.5% revs Q4 "doomsday": 24% revs Q4 "AMD guidance": 28% revs There isn't much difference (24% vs. 28%) in AMD's flash guidance vs. your doomsday scenario. Besides, I think the market cares much more about keeping flash in the black than its revenue, as expectations are not high for flash profits, but they do not want to see CPG profits eaten up by flash losses. Doug people have different views. We place our bets and live with the results. Wish I had a bit less in AMD right now, but I'll live just fine.