Q4 Preview: AMD (AMD) May Have Weak PC Sales Already Priced In

Advanced Micro Devices, Inc. (NYSE: AMD) shares are looking strong heading into the company's fourth-quarter earnings report, expected out after the market close Tuesday.

The Street is currently looking for earnings of 16 cents per share and revenue of $1.72 million.

AMD shares fell 20.9 percent through the quarter and are up 24 percent since.

Some reassurance might come from Intel (Nasdaq: INTC), which issued strong numbers across all metrics for its fourth-quarter reprt last week. Intel saw its revenue increased 21.2 percent, though net income rose just 5.7 percent as margins continue to compress on increased input costs. For more on Intel's quarter, click here.

Data from Bloomberg has 11 analysts with a Buy rating, 16 at Hold, and six with a Sell. The Street' price target average is $6.50, with a low of $4 and high of $12.

Analyst Comments

• Deutsche Bank sees earnings of 17 cents per share and revs of $1.74 billion. Deutsche commented, "We note that this 4Q growth of +3% is well below typical seasonality to reflect the Thai flood impact. From a product perspective, we expect soft Brazos and GPUs to be offset by higher shipments of Llano (Mobile) and Interlagos (Server)."
  
  Taiwan Semi also had a revenue drop of 13 percent sequentially, Deutsche said. Gross margins are being modeled at 44.6 percent. Key focus items include: "1) Product mix, 2) Market share losses/gains vs. INTC and NVDA, 3) Manufacturing yields, 4) Inventory."
  
  
• Goldman Sachs is bearish into numbers, seeing EPS of 16 cents and revs of $1.74 billion. Goldman said, "While we believe that AMD’s sales were negatively impacted by inventory reductions similar to Intel (Intel’s 4Q11 sales declined 3%
  qoq), AMD could have achieved the low-end of its guidance driven by catch-up shipments of its new 32nm Llanos and Interlagos products, which had both been delayed in 3Q11."
  
  Goldman is modeling for a 3 percent sequential drop in PC revs Q/Q for the fourth-quarter and widening to 17 percent in the first-quarter of 2012. Both those estimates are ahead of the Street. Goldman also sees AMD losing some revs as Hewlett-Packard (NYSE: HPQ) is facing headwinds and market share losses currently.
  
  
• Wedbush sees EPS of 16 cents and revs of $1.72 billion. Though Wedbush is looking for softer guidance for the first quarter, the firm believes much of that is already priced into the stock.
  
  For the first quarter, Wedbush said, "Although our checks indicate yields from GlobalFoundries are improving, we think the challenging supply of HDDs in the 1H will likely result in AMD providing top line Q1 guidance in-line with our estimate ($1.56B) and below the Street ($1.60B)."

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out AMD's past performance at Streetinsider's AMD's Income Statement.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Walmart (WMT) PT Lowered to $130 at UBS on Investment Narrative's Competing Dynamics
• Mizuho Reiterates Outperform Rating on Broadcom Limited (AVGO) Into EPS
• Investing.com’s stocks of the week