AMD Faces Looming Cash Crunch Amid Quest for New Markets |
| Bloomberg - Oct 25, 2012 |
Advanced Micro Devices Inc. (AMD), the long-struggling competitor of giant rival Intel Corp., is facing yet another crisis amid a shifting technology landscape and declining demand for personal computers.
Chief Executive Officer Rory Read is firing workers to pare expenses as the chipmaker’s sales slide. Still, he can’t cut costs fast enough to head off his next looming challenge: shrinking cash reserves. Cash declined to $1.5 billion in the third quarter, shedding $279 million from the previous period.
If the trend continues, cash levels may drop to $600 million by this time next year, according to an estimate by Sanford C. Bernstein & Co. That compares with the $1.1 billion in reserves the company said it requires, and a quarterly operating expense target of $450 million. AMD has $2.04 billion of debt.
“I’d never been worried about cash flow; I am now worried,” said Stacy Rasgon, an analyst at Bernstein.
Read said the decline of the PC market -- which provides 85 percent of AMD’s sales -- happened faster than he expected and left him with less time to remake the company. As AMD concentrates on developing products for new markets, Rasgon, Chris Caso at Susquehanna International Group and Craig Berger at FBR Capital Markets are among analysts who say they’re concerned AMD might run out of money before any transformation can happen.
Read Full Article from Bloomberg
- Posted: 2012-10-25 15:01:29
| More Stock Investor Place Company News |
 |
|
|
|
| Stock Investor Place Company News Archive |
|
|
|
