For Immediate Release
Chicago, IL ” January 26, 2012 ” Zacks.com announces the list of bonds featured in the Analyst Blog. All day the Zacks Equity Research analysts confer the ultimate headlines and events impacting bonds and the financial markets. Stocks not long ago featured in the blog include Celgene Corporation (NasdaqGS: CELG – News ), Advanced Micro Devices (NYSE: AMD – News ), Seagate (NasdaqGS: STX – News ), Western Digital (NYSE: WDC – News ) and Intel Corp (NasdaqGS: INTC – News ).
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Here are highlights from Wednesday’s Analyst Blog:
Earnings Preview: Celgene
Celgene Corporation (NasdaqGS: CELG – News ) is set to betray its fourth entertain and full year 2011 results on January 26, 2012 before the beginning of trading. The Zacks Consensus Estimate is to fourth entertain is 95 cents (year-over-year enlarge of 53.2%) on revenues of $1,289 million (year-over-year enlarge of 20.9%).
For 2011, the Zacks Consensus Estimate is $3.33 (year-over-year enlarge of 38.2%) on revenues of $4,827 million (year-over-year enlarge of 33.3%).
Third Quarter Recap
Celgene’s third entertain 2011 gain (excluding special things but inclusive stock-based reward expense) of 90 cents per share beat the Zacks Consensus Estimate by 4 cents and the year-ago gain by 25 cents. Higher revenues increased gain in the quarter.
Total revenues climbed 37% to $1.25 billion in the third entertain of 2011. Revenues were increased by the splendid opening of Celgene’s cancer products Revlimid and Vidaza.
Surprise History
Celgene has surpassed gain estimates in two of the final 4 quarters. The firm available a limit certain astonishment of 12.79% in the third entertain of 2011. On average, the gain astonishment was 2.09%.
Our Recommendation
We have an Outperform testimonial on Celgene. We think that Celgene, driven by its splendid oncology portfolio, enlargement efforts, burly change piece and robust pipeline, will outperform the broader marketplace in the forthcoming quarters.
Our confidence is fit by the Zacks #2 Rank (Buy rating) carried by the batch in the short run.
Few Bright Spots in AMD’s Q4
Advanced Micro Devices (NYSE: AMD – News ) reported fourth entertain loss of 10 cents a share, at large omitted the Zacks Consensus Estimate of gain of 16 cents. Investors evidently approaching the firm to be impacted by the conditions in the Personal Computer market, so shares mislaid only 2.91% in after-hours trading.
Revenue
AMD’s revenues in the final entertain came in at $1.69 billion, prosaic sequentially and up 2.5% from the year-ago quarter. HDD lack at Seagate (NasdaqGS: STX – News ) and Western Digital (NYSE: WDC – News ) threw the Personal Computer marketplace put of rigging and prevented the firm from discussion its superintendence of a 3% consecutive enlarge (at the mid-point).
Revenues moreover longed for accord expectations of $1.72 billion by 1.7%. AMD evidently benefited from strength in its new products Brazos, Bulldozer and Llano. However, the firm appears to have fared worse than Intel Corp (NasdaqGS: INTC – News ), that reported final week.
Revenue by Segment
Computing Solutions was 77% of AMD’s sales in the final quarter, up 1.8% sequentially and 7.4% from the year-ago quarter. Similar to the September quarter, portion was opening was helped by an enlarge in processors and chipsets for servers, together with increased shipments of the Llano APU. AMD obviously mislaid belligerent in normal computing systems, that might not be such a big concern, since the stream trends.
AMD’s graphics business generated the outstanding 23% of its sales, down 5.2% sequentially and 9.9% from a year ago. Despite the seasonal enlarge in income from diversion consoles, AMD was impacted by the reject in mobile GPU chipsets. Overall volumes declined, with a slight certain effect from mix.
Margins
AMD reported a pro forma sum border of 45.7%, up 98 basement points (bps) from the formerly entertain and 65 bps from the year-ago quarter. The sum border benefited from aloft ASPs, as AMD saw certain blend in both segments. While the Globalfoundries situation continues, AMD settled that it was in the routine of working out a suitable arrangement.
Operating costs of $601 million increased by around 1.5% sequentially nonetheless they were prosaic with final year. The working border stretched 153 bps sequentially and 162 bps year over year to 10.2%. While all costs declined as a commission of sales from both the formerly and year-ago quarters, cost of sales declined the most.
Both the segments”Computing Solutions and Graphics”did well. Computing Solutions generated an working border of 12.6%, up 102 bps sequentially and 514 bps year over year. Graphics generated an working border of 7.1%, that nonetheless up 409 bps sequentially was down 897 bps from a year ago. Mix and pricing were positives for both segments.
Net Profit
On a pro forma basis, AMD generated a net loss of $72 million, or a -4.3% net margin, compared to a distinction of $95 million, or 5.6% in the formerly entertain and $105 million, or 6.4% in the prior-year quarter.
Including restructuring and intangibles amortization charges, the entirely widely separated GAAP net loss was $177 million, or 24 cents per share compared to income of $87 million, or 12 cents a share in the formerly entertain and a income of $375 million, or 49 cents a share in the year-ago quarter.
Balance Sheet
AMD has completed a unequivocally great work reshaping the change sheet. Despite the slight reject in money upsurge in the final quarter, the firm one after another its opportunistic repurchases of debt. As a result, the long term debt forsaken to $1.53 billion in the final entertain from 1.57 billion at the finish of the September quarter.
The net debt at quarter-end was $251 million, compared to $253 million at the finish of the September entertain and $403 million at the finish of the December 2010 quarter. AMD finished with a debt to complete capitalization proportion of 56.7%. The money and temporary investments change at quarter-end was $1.8 billion, down 42 million during the quarter.
Working funds metrics remained burly in the final quarter, with inventories dropping 11.9% sequentially to $476 million and register turns stepping up from 6.9X to 7.7X. Days sales outstanding (DSOs) increased from 49 to 50.
During the quarter, AMD generated $187 million of money from operations, spending $87 million on capex and $51 million on repayments of debt and funds franchise obligations. Management expects debt repayments to continue.
Guidance
AMD guided to initial entertain consecutive income lessen of 8% (+/- 3%), next road expectations of around $1.6 billion. The sum border is approaching to be around 45% and working costs around $590 million.
To Conclude
AMD proposed off the year pretty well, if not in decorated style. We think there are a few things that should fascination investors at this point. The initial of these is execution.
We feel unequivocally great about a firm that has been consistently delivering on its promises over the past few quarters, either with apply oneself to office building its product portfolio, or with apply oneself to cleaning up its change sheet. The subdivision of Globalfoundries liberated AMD from production pressures, enabling it to concentration on RD instead.
However, whilst AMD’s products are being launched on report and it does look as if it will take some share from Intel, you must be bear in thoughts that Intel moreover has some new products lined up, that along with its flourishing ability and lead at 22nm, should keep it forward of AMD.
Cost efficiencies can only do so much; actual enlargement of margins is contingent on superior technology. AMD is on the correct follow and its new products are already helping. But there seems to still be a ways to go.
Given the one after another debility in near-term results connected to problems in the Personal Computer market, you sojourn prudent about investment in the shares. AMD shares thus bring a Zacks Rank of #4, implying a Sell testimonial in the temporary (1-3 months). We are Neutral on a long-term (3-6 month) basis.
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