What did it do? It cut its earnings from the street estimates of $1.84 billion to about $1.67 billion, a $150 million miss. That is bad. What is worse is how it did it. It put out a press release at 8PM EST on a Thursday as CES was ending so no one would see it. If there was any doubt that it was trying to bury this as deeply as possible, it apparently didn't send out the releases to the financial analysts.
Could it get worse than angering all the analysts who were on a plane or on vacation after CES? Sure it could, the biggest problem was that it had this little analyst day in mid-December and gave a much rosier outlook less than a month ago. So 5/6th of the way through the quarter, you would expect AMD to be at about 5/6ths of its income or $1.5 billion.
So, why would AMD make this bad miss? The financial analysts we've talked to, say it was borrowing a lot of money a few weeks ago, as we reported at the time.
If you have solid financials and a rosy outlook, people want to give you cash. If AMD was hitting on all cylinders, it was easier to get a more favourable rate on the money.
So, the angered analysts are angry because the release came at a time when the least possible number of analysts would see it. They claim it was meant to minimise the impact on stock prices. The analysts we talked to were livid about this and used a lot of terms that are not printable here.
To make matters worse, AMD had an uptick in sales. This good news was countered by the bad news on lessened margins. The good news is absolutely buried, forgotten and no one came to the funeral.
There is nothing here that is good, everything about the announcement today is a negative. The negative repercussions of this are going to be felt for a lot longer than AMD hopes. µ
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