Guten Morgen AMDler,
hier ein interessantes Posting von JC:
" Great news on AMD and the stock drops. Or
> did he just buy?
I guess that lays to rest the whole "JC is a contrarian indicator" silliness.
The reason why this happened is because AMD`s ability to communicate with analysts is similar to a piece of fruit`s ability to communicate with a fruit fly.
AMD should have explicitly said something about their 20% tax rate. Analysts gave estimates assuming no tax rate. Had AMD reported $1.41 earnings and used that same tax rate, they would have beaten consensus by 23% while getting hammered by analysts for missing consensus.
All AMD had to say was "by the way, we`re going to assume a pre-emptive 20% tax rate this quarter to ensure a smoother profit ramp in future quarters". Analysts would then have dropped their consensus to about $1.00 (some analysts would drop by 20%, some would be too lazy to drop, end result would be about a 12% drop), and AMD would beat the street by 21%, or $0.21 per share.
But noooo. Despite AMD`s incredible management [and I do believe, contrary to popular opinion, that their management is incredible -- anything less than an incredible management would not have been able to bring AMD from the barred-from-cloning shop they became in 1994 (or so) to the profit machine they are in 2000 -- lesser management would have never overspent in the manner that AMD had to do in order to ensure future strength], they have no idea how to make themselves actually look good to people who don`t understand their industry (like most analysts).
- AMD should have announced the tax thing, even if during their quiet period.
- AMD should have specifically referenced the third party reports alleging that they serve over 90% of the 1.00GHz market and over 70% of the 0.9xGHz market.
+ AMD did well in explaining why Flash is not on a decline, and they actually did it without personally insulting Jon Joseph
- AMD should have brought specific attention to their P/E ratio. They should have noted very aggressively that they are earning much more per share than others in the semi market and are having a much better future outlook, all while having a much lower per share market valuation (stock price) than many in their industry
- AMD tried jabbing at Intel`s earnings, but they screwed it up. They noted that all of Intel`s operating profits were in x86 cpus, and other areas were down. Bad move. They should have brought attention to AMD and Intel`s relative total year on year operating revenue and earnings improvement. They should have noted that Intel`s YoY "operating" revenue growth was 23% and their YoY operating earnings growth was 3.8%. They should have then have pointed out that the equivalent growth numbers for AMD, which are something like 97% and ... well, suffice it to say, effectively an infinite percentage increase in earnings. <g>
- AMD should have focused on YoY outlook, not QoQ outlook. They should have added how much 2000Q3 is expected to differ from 1999Q3. Nothing more bullish than they`d already say: Basically, something like "We expect our 2000 third quarter revenue to exceed our 1999 third quarter revenue by 75% or more. Income in 2000 third quarter is expected to be positive, and at least double the operating loss that was reported in 1999Q3. If market conditions remain stable and projections go as planned, then our total cash holdings should be greater than our total debt by the end of the year, for the first time since 1997 (or whatever said year is)".
AMD gave blowout earnings on horrible guidance. This makes them look like an uncertain company when they are doing phenominal, and it makes them look like the worst company in the world when they are in a rut. This is stupid, and should be changed. This can be changed, with minimal effort.
-JC
MfG
Russian KGB
P.S.: @uwekna: ich habe meine Rechnungen hier im Board offengelegt (zur Diskussion) und erklärt unter welchen Prämissen es funktioniert.
Im ersten Quartal war ich näher dran. Jetzt nicht. Aber ich versuche immer argumentativ vorzugehen. Schade, daß dir mein Optimismus nicht gefällt. Und die Berechnungen auch.