bestätigt.
1) Bis 1/2008 wird AMD hart am Limit kämpfen.
2) Ab 1/2008 werden die Verkäufe von Barcelona und Co die Bilanz aufbessern.
3) Inwiefern Barcelona Intels Core 2 Duo ins Abseits stellt, bleibt zwar noch abzuwarten. Spätestens auf der Computex im Juni sollte AMD aber mit ersten richtigen Benchmarks rausrücken.
New Chips, Cost Cuts Unlikely to Rally AMD Shares
By Nicole Ridgway |Nicole Ridgway Archive |Published: May 15, 2007
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AS FAR AS YEARS go, 2007 hasn't been a pretty one for Advanced Micro Devices (AMD: 15.33, -0.07, -0.5%).
AMD, which not long ago took the microprocessor world by storm, is now scrambling to play catch-up. It has lost significant ground to Intel (INTC: 22.04, +0.03, +0.1%), experienced major delays in launching new products and has seen its margins squeezed by falling prices. These issues (in addition to acquisition-related charges) caused AMD to swing to a loss of $611 million during its most recent first quarter. Finance chief Bob Rivet described it as "a terrible start to the year."
Of course, AMD says it has a plan to get out of its funk. That strategy entails cutting costs and growing the top line through more competitive pricing and the launch of new products. Certain pieces of that plan are starting to fall into place. On Monday, AMD launched part of its new ATI Radeon HD 2000 series of graphics processors and announced the naming of it new line of quad-core processors due out later this year. Last week, it said it would cut 430 jobs (2% to 3% of its work force), on top of previously announced plans to reduce its capex spending by roughly $500 million. The announcements have bumped the stock 15% higher since May 9.
I agree that these moves should help AMD regain its footing, but they may prove to be too little too late to completely turn 2007 around for the company. For investors, it's evident that a lot of the bad news has already been baked into AMD's stock price. The shares have fallen 51% in the past 12 months. Meanwhile Intel's shares have climbed more than 16%. However, I see few catalysts ahead to help sustain any meaningful gains in AMD's stock — at least over the next couple of quarters.
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Parsing the details of AMD's latest product announcements, for example, provides clues that the company continues to miss certain crucial marks. First, look at the new graphics processor line. This long-anticipated product launch is the first to come out of AMD's $5.4 billion acquisition of graphics chip maker ATI Technologies.
There's little doubt that there should be healthy demand from gaming fans and those upgrading their PCs to Microsoft's (MSFT: 30.97, +0.07, +0.2%) Vista operating system, but what's disconcerting to me is that it has taken so long to get the products out the door — and the line is still not completely ready for launch.
AMD initially anticipated rolling out the new graphics line last fall, around the same time that competitor Nvidia (NVDA: 34.12, -0.36, -1.0%) rolled out its GeForce series of GPUs. AMD's delays gave GeForce, which adds a second processor to the PC for running advanced applications like high-def video and PC gaming, a considerable seven-month lead.
Last month, AMD said its entire line of graphics processors would now be available in May. Sure enough, a launch was made in May. But if you look closely at the company's press release Monday, only the high-end Radeon HD 2900 XT is currently available. The other graphics card lines, the HD 2600 and HD 2400 series, aren't slated to ship until late June, leaving very little positive impact on the company's second quarter.
"In all of the excitement and the hoopla [surrounding the announcements], people may not have realized that AMD is once again experiencing execution issues," says Hans Mosesmann, an analyst at Nollenberger Capital Partners who's had a Sell rating on AMD's shares since December.
There's also been quite a bit of hoopla surrounding the impending launch of AMD's new quad-core processors. The quad-core puts four processors on a single piece of silicon and will be pitted squarely against Intel's Core 2 Duo and Core Extreme for desktops and its Xeon processors for servers. AMD spent a considerable amount of ink Monday on an announcement that merely said it had named the new desktop line of processors "Phenom" and a related platform "FASN8" (get it? — "fascinate"). FASN8 bundles two Phenom processors with high-end graphic chip, the HD 2900 XT.
I'll give AMD credit for choosing a cool name, but investors should keep in mind that the company's Phenom quad-core processors won't be available until the second half of this year. "You won't see Phenom in the desktop until probably Christmas," says Mosesmann. "Intel has a year lead."
AMD is banking on its claim that Phenom will offer faster speeds than the type of quad-core chip that Intel offers, which put two cores on two chips. Any financial benefits from the Phenom and Barcelona (the name of the quad-core processors for servers) however, probably won't be seen until 2008, says Mosesmann.
One near-term catalyst for the company's stock would be its second-quarter earnings report. During its quarterly conference call in April, the company said it expects revenue during the seasonally slow quarter to be "flat to slightly up." ThinkEquity analyst Eric Ross upped his rating on AMD Tuesday on the belief that demand from AMD customer Dell (DELL: 25.37, +0.70, +2.8%) will be stronger than anticipated during the quarter. Ross, who also raised his price target to $19 from $10, believes the company could beat expectations in the upcoming quarter.
AMD could surprise on the upside, but any gains probably won't be sustainable until all of the company's cost-cutting efforts are underway and its products launched. We can expect to hear more about the company's restructuring plans during a planned analyst meeting this summer. In the meantime, Nollenberger's Mosesmann believes the company's shares will remain in the midteens "up or down two points" throughout the summer.