If you have some cash to invest today, Mr. Market is doing you a solid favor. Shares of Advanced Micro Devices
(NYSE: AMD) fell after a surprisingly strong earnings report, and I
think it's all a big misunderstanding. In other words, this would be a
great time to load up on discounted AMD shares.
Nobody seems to care about the flipside of the coin. The $0.66 GAAP
loss per share was indeed wider than the year-ago quarter's $0.60 loss
per share -- but much better than last quarter's massive $2.37 loss per
share. Despite strong product launches from rival Intel (Nasdaq: INTC) and a continued weak economy, AMD has clearly turned a corner through cost savings and restructuring.
In terms of sales, the story turns outright positive. Net revenue
was down 21% year-over-year to $1.18 billion -- but that's actually
1.3% net sales growth from last quarter. Last year, the first quarter
saw 22% lower sales than the previous period. The year before that, it
was a 36% seasonal sales swoon. In 2006, it was a 28% drop. AMD is
producing stellar sales while swimming against seasonal currents.
As for CEO Dirk Meyer's presumed doubts about the PC market's
bottom, here's what he had to say about that: "You know, I've heard
some say that we've hit bottom. I don't know how anybody could say that
we've hit bottom given the continued uncertainty that we have in the macroeconomic climate. And as a result of that I would say we're simply being cautious in our outlook." He's hardly crucifying Dell (Nasdaq: DELL), Hewlett-Packard (NYSE: HPQ), or server partner Sun Microsystems (Nasdaq: JAVA) here -- it's just conservative estimates for the murky waters ahead.
Historically, the second quarter has been a challenging quarter for
AMD. "You put all that together and the outlook is murky at best, and
that results in our forecast," Meyer said. And I think a few news
outlets missed these ameliorating facts.
So AMD is going, going, gone at slightly lower prices today than
yesterday, despite a generally up market. And I don't see any good
reason for that price drop. Feel free to take advantage of the mispricing, while it lasts.
© 2009 UCLICK, L.L.C.
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