Official AMD Q1 Earnings Thread -

[fidgewinkle]

Anybody calculate the cash burn rate and cash on hand???

They've got to be < $900... they will not survive the quarter without more cash.

Now it's time to do the BK math...

Many of their expenses might be depreciation or write-downs that aren't related to liquid holdings. They won't take a loss of $611Million to their cash holdings. It would be interesting to know what their cash holdings are though.


FYI - Expenses are not the only use of cash... AMD has massive capex committments (balance sheet transaction).

Again, I'd be surprised if they had more than $900M in cash on hand.

The only way that cash goes down faster than book value is if there is a paper gain. I don't think AMD is sporting too many paper gains, certainly not enough to offset the many paper expenses they have like employee stock options. And what do you know, the $1.1Billion in cash report bears out my point.

They still could be in a worse cash position than they are showing though, as they could be sitting on capex commitments that will deplete cash in a future quarter.

 

[carlhungis]

ASP not expected to increase till Barcelona

For a while ... until Intel starts unleashing 45 nm chips 8O

65 nm vs 45 nm pricing.

Did I just hear right that they will be producing 45nm in 1H08? How on earth is that possible when they just earlier said that they would slow transition of fab30 (think that's right fab) to 300mm? How on earth can they do all this in parallel? Not to mention the fact that their 65nm is a bit quesitonable as it is. ???

Sounds to me like an attempt to deceive investors. Kind of like how they have come up over $500million dollars short of their own guidance for each of the last two quarters. They know how bad things are, yet they seem to be more than happy to lie through their teeth.

 

[SuperFly03]

Reuters reports that AMD is looking at selling assets to increase their cash holdings.

Yeah, small change stuff... the debt convenant strickly forbids them from selling off any large assets...

$30M max as I recall before they have to fork it over to the bank.

I will have some comments on this, but I bet the debt covenants get altered to allow AMD to sell some assets to so they don't have to take on additional debt.

 

[benzene]

He also said "hats off to our competitors, they've done really well in closing the gap" ...one for Sharikou.

 

[SuperFly03]

Very short summary of noteworthy items: (analysis coming)

R600 release in may

Barcelona on track for q3 retail shipment

They will engage in a sales leaseback agreement for cash

Reduction in cap ex mainly on the 2nd half of 2008 related to reduction in conversion of Fab 30 from 200mm to 300mm tools.

Increased inventory levels and they still ramping production capacity, 40% of inventory increase is 65nm products.

move to asset light business model, makes an allusion to sales of capital assets and lease backs as well.

Anticipate flat Q2 revenue in a seasonably light quarter due to the offesetting revenue from the R600 release.

Opex of 750m in Q2

ATI related charges of 80m in Q2

Tax provision of 25m in Q2

Expect 45nm production in middle of next year.

Really pushing Barcelona and I mean BaronMatrix kind of enthusiasm. Desktop variants in 2C/4C due in Q3.

Shipping problems also led to poor quarter performance and a shift from desktop to mobile shipments.

Avoided details of chipsets in the works.

Alluded to Fusion in the future with the design of sockets.

Real good observation, AMD maintained cash balance by collecting on receivables providing nearly 500M in cash over the quarter.

Turion due for refresh in 2008 in H1 at the OEM level.

Grants and subsidies to receive in excess of 400M in cash in Q2.

ASP for mobile are down and sequential sales were more to blame than ASP problems. Waiting on research company publications. Prices, according to AMD, have generally stabilized.

Starting production of 45nm in H1 and product shipment in H2.

Direct question about private equity buyout.
Response: AMD management isn't denying it as long as it makes sense for them to get capital that way. They will consider it.

Barcelona demonstration this summer.

See no effect of R600 launch on back to school seasonal sales.

Depreciation increase of 25-40M quarter over quarter.

New chipsets due in the 3Q

R600 Launch question:
2nd part of may
10 products
All have DX10
Fully qualified drivers
"We don't do soft launches"

 

[bixplus]

Here's a good quote from Ruiz.. " we don't do soft launches". HuH?

 

[BaldEagle]

HOLY HELL he just took a pot shot at Intel.

In effect said: Hey, we had 4 amazing years out performing our competitor, took them f***in long enough to beat us. LOL

Yep,

From Conference:

And he said they will improve quarter by quarter

Platform wins, 3rd quarter ATI, PC side bla, bla, bla, FUD
R600 launch - 10 products, dx10, with drivers that work, buy your cards at the launch, no paper launch

 

[Twisted_Sister]

Anybody calculate the cash burn rate and cash on hand???

They've got to be < $900... they will not survive the quarter without more cash.

Now it's time to do the BK math...

Many of their expenses might be depreciation or write-downs that aren't related to liquid holdings. They won't take a loss of $611Million to their cash holdings. It would be interesting to know what their cash holdings are though.


FYI - Expenses are not the only use of cash... AMD has massive capex committments (balance sheet transaction).

Again, I'd be surprised if they had more than $900M in cash on hand.

The only way that cash goes down faster than book value is if there is a paper gain. I don't think AMD is sporting too many paper gains, certainly not enough to offset the many paper expenses they have like employee stock options. And what do you know, the $1.1Billion in cash report bears out my point.

They still could be in a worse cash position than they are showing though, as they could be sitting on capex commitments that will deplete cash in a future quarter.

I believe, per the 10-K, they have $1.7B in CASH committments for 2007. That's why they only brought spending down $500 to $2B... they don't have much room to manuever.

 

[Wombat2]

R600 release in may

Can someone give me a no BS explanation as to why R600 is so late?

 

[SuperFly03]

To address the cash burn comment: I heard some very specific comments from AMD management that makes me think they will engage in a standard sales-leaseback agreement to raise capital by selling some sales and marketing buildings.

All in all this isn't a surprising choice for AMD. I doubt their debt covenants are pretty. Also with the market in its current state, the banks don't want AMD to take on more debt. They already took on nearly 3B in debt for the ATI acquisition and they have their margins under pressure. AMD can get authorization for violating the covenant which, if it prevents taking on more debt, I believe the banks will sign.

The sales-leaseback is a good solution to short term cash problems as long as they can get a reasonable implicit interest rate.

 

[BaldEagle]

Grants and subsidies to receive in excess of 400M in cash in Q2.

I recall hearing that was spread over second half Q3 and Q4 but I didn't get it down in my notes.

 

[SuperFly03]

R600 release in may

Can someone give me a no BS explanation as to why R600 is so late?

Honestly, I don't know. I really have no idea.

Rumors have been drivers, fab problems, switch to 80nm instead of 90nm, heat issues, voltage irregularities.

So honestly, we don't have a non-BS explanation.

Grants and subsidies to receive in excess of 400M in cash in Q2.

I recall hearing that was spread over second half Q3 and Q4 but I didn't get it down in my notes.

No, that was specific Q2 numbers, but you are right the overall grant collections will be throughout the entire year, thus providing some dependable cash sources.

You could be right, but I really think that was a Q2 specific amount. If you find something else, let me know. 😀

 

[r0ck]

45nm in dresden Q1 08'

I believe they said "starting" 45nm in H107. Well, Intel had 45nm samples in H206.

 

[BaldEagle]

R600 release in may

Can someone give me a no BS explanation as to why R600 is so late?

I heard they deleted the drivers, or the dog ate their homework, something like that.... :lol: :lol:

 

[SuperFly03]

45nm in dresden Q1 08'

I believe they said "starting" 45nm in H107. Well, Intel had 45nm samples in H206.

Hmm no. H1 08 for preproduction samples and H2 for consumer shipments.

This timeline is very aggressive imo.

 

[Shizamaaur]

Rumors have been drivers, fab problems, switch to 80nm instead of 90nm, heat issues, voltage irregularities.

Whatever happened to them being 65nm?

 

[cxl]

BTW, what I really do not get is after-hours stock price - it is up 5%!

Maybe if AMD have had announced bankrupcy they could get it to $50 immediately

Mirek

 

[BaldEagle]

45nm in dresden Q1 08'

I believe they said "starting" 45nm in H107. Well, Intel had 45nm samples in H206.

Hmm no. H1 08 for preproduction samples and H2 for consumer shipments.

This timeline is very aggressive imo.

That is what I had although I wrote down Q1 sample starts and H2 production.

That is very, very, very agressive considering the cash position.

 

[fidgewinkle]

Rumors have been drivers, fab problems, switch to 80nm instead of 90nm, heat issues, voltage irregularities.

Whatever happened to them being 65nm?

It would be ATi that is using the TSMC 80nmprocess because they had already been doing work in that process before they were acquired by AMD.

 

[fidgewinkle]

BTW, what I really do not get is after-hours stock price - it is up 5%!

Maybe if AMD have had announced bankrupcy they could get it to $50 immediately

Mirek

After hours trading is screwy. We won't know the real impact until tomorrow.

 

[SuperFly03]

BTW, what I really do not get is after-hours stock price - it is up 5%!

Maybe if AMD have had announced bankrupcy they could get it to $50 immediately

Mirek

It's up to $15.

A great many people feel this information is optimistic. Which I actually see, it may not be a bad time to get into the AMD game. Q2 is going to be rough with a stock price like to bottom out around 10-10.50 but by H108 I wouldn't be surprised to see a nice capital gain.

Assuming AMD follows through with Barcelona and it can do what they say it can on 65nm.

 

[BaldEagle]

BTW, what I really do not get is after-hours stock price - it is up 5%!

Maybe if AMD have had announced bankrupcy they could get it to $50 immediately

Mirek

They liked the spin from Hector who said "it will get better quarter by quarter" but that wears off fairly fast.

 

[bixplus]

45nm in dresden Q1 08'

I believe they said "starting" 45nm in H107. Well, Intel had 45nm samples in H206.

Hmm no. H1 08 for preproduction samples and H2 for consumer shipments.

This timeline is very aggressive imo.

Damn near impossible!!! Samples from who, Chartered, IBM?

 

[r0ck]

Intel shipped 65nm in H205, AMD ships in H206. Intel is set to ship 45nm in H207, AMD is set to ship (without high-k) in H208. Notice a pattern?

 

[MatrixBaron]

Baron is surprisingly quite? :?

Sorry, even Shariqou couldn't spin this one, let alone me.