AMD Challenges Will Persist In 2015, Says Oppenheimer

In a research report sent to investors, Oppenheimer analyst Rick Schafer maintained an Underperform rating on Advanced Micro Devices (NYSE:AMD), following the company’s fourth-quarter results, posting EPS of $1.24B/$0.00, roughly in line with consensus $1.24B/$0.01E. However, first-quarter guidance of $1.05B (down 15% Q/Q), fell short of expectations. No price target was provided.

Schafer noted, “While PCs have shown signs of stabilization, AMD sees PC units down low-single-digits percentage in 2015; however, we believe AMD’s core PC/graphics sales are likely to fall faster as INTC gains incremental share at the low-end. We believe AMD’s full-year non-GAAP “break-even” profitability outlook likely proves optimistic, and note that it excludes ~$20M/qtr in stock-based compensation, approximately $0.10 in annual EPS.”

Bottom line, “With incremental balance sheet concerns and incremental share loss, we see little to no earnings power for the foreseeable.”