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ECT News Community   »   E-Commerce Times Talkback   »   Re: Tech Companies Meet Targets, But Concerns Remain

Re: Tech Companies Meet Targets, But Concerns Remain
Posted by: Keith Regan 2003-04-17 14:38:17
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Three of the best-known technology companies -- Sun, Apple and AMD -- have posted fresh earnings reports, and while none contained blockbuster successes, most were about on par with expectations. Taken together, the results paint a picture of a slow quarter, but one that companies were able to make adjustments to handle. But IDC research director Stephen Minton told the E-Commerce Times it is possible that enterprises will rein in spending on technology even more until there is a clear sign of economic recovery.

AMD has tuned the corner & beat the consensus
Posted by: Petz 2003-04-17 16:10:49 In reply to: Keith Regan
AMD has turned the corner. Revenues rose by 4% quarter over quarter, which beats nearly every technology company that has reported earnings, including Intel, IBM, Apple and Microsoft. It is also an indisputable fact that AMD did better than the consensus estimates. The consensus earnings according to Yahoo was $(0.48) and the actual was $(0.42). The very highest revenue estimate of 17 analysts was $710M, and the actual was $715M.
This is amazing because AMD is about to release an entire new line of products based on 64-bit technology NEXT WEEK. It is typical that any company that is coming out with a major new product line experiences a DECLINE in sales as its customers wait for the new product. Couple that with the double-whammy that Q1 sales are usually way below Q4 sales, to wit:
IBM sales dropped 15.3% from Q4 to Q1
Intel sales dropped 5.7%
Microsoft sales dropped 8.2%
Apple sales were flat
Furthermore, you are inconsistent. For AMD's sales and profit you decided to compare against the prior YEAR, but in flash memory, you complain about the tiny INCREASE in quarter-over-quarter results (<1%). It had a 36% INCREASE over last year's quarter! Flash memory sales are ALMOST ALWAYS DOWN in the 1st quarter, for example, Intel, its biggest competitor, reported a 29% DROP Q/Q. So a 1% increase in Q2 is, in reality, a major victory. BTW, Intel's flash sales only increased 3% year-over-year.
The key thing to look for to detect a turn-around situation is quarter over quarter results compared to the normal seasonal pattern. In that respect, AMD clearly beat the normal industry pattern of lower sales and profits in the 1st quarter. The new product lineup in 64-bit microprocessors will vastly improve the profitability of AMD's operations, since these devices sell for about 7x the price of 32-bit microprocessors but only take 20% more resources to produce.
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