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Wednesday, October 18, 2006

AMD Beats the Street; How Does It Compare to Intel?

Advanced Micro Devices (AMD) posted a strong quarter $0.27 EPS and revenues of $1.33 Billion. The street was looking for $0.24 EPS and $1.31 Billion.

AMD expects demand to be seasonally strong in the fourth quarter and sales to increase sequentially on an ex-ATI basis.

Next quarter estimates are $0.33 EPS and $1.44 Billion.

Third quarter gross margin was 51.4 percent, compared to 56.8 percent in the second quarter of 2006 and 55.4 percent in the third quarter of 2005. That is from the Intel-AMD price wars. Desktop processor sales were flat sequentially with increased unit shipments offset by decreased ASPs. It posted an 18% quarter-over-quarter increase in microprocessor unit shipments.

So the real question is: Who is telling the truth, and who is lying? Yesterday Intel noted it was taking back some lost market share, yet AMD posted these gains. It appears that the lower margins may tell it all and trying to look back now may be driving by the rearview mirror.

AMD is halted in after-hours trading. Intel (INTC) is down 0.33% after-hours at $21.04, after closing up 1% in regular trading at $21.11.

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