Oppenheimer Remains Bearish on Advanced Micro Devices (AMD) Following 2Q Results and Guidance
Oppenheimer reiterated an Underperform rating on AMD (NASDAQ: AMD) following the release of its 2Q15 earnings results. AMD reported relatively in-line 2Q sales and EPS of $942M and ($0.19) respectively. Management guided 3Q sales up 6% to ~$1B.
Analyst Rick Schafer commented, "We are cutting our near Street-low estimates despite AMD delivering 2Q sales/EPS of $942M/($0.19), roughly in line with reset expectations following the company's negative pre-announcement on 7/6. AMD guided 3Q sales up a seasonally normal 6% Q/Q to ~$1B, as PC OEM sales have apparently found bottom. Positively, AMD believes 2Q revenue represents a trough for 2015 following a multi-quarter inventory re-balancing. Despite recent speculation, we continue to believe AMD is an unlikely acquisition target as any change of control would require an x-86 license renegotiation. While semi-custom design wins are encouraging, timing to revenue (2H16) and structural challenges in AMD's core PC segment present incremental FCF and balance sheet concerns in our view, thus we maintain our Underperform rating."
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Shares of AMD closed at $1.87 yesterday.