FBR Capital Maintains Outperform on Advanced Micro Devices After 4Q Earnings

FBR Capital Markets has published a research report on Advanced Micro Devices

after the company reported respectable 4Q earnings yesterday. In the report, FBR Capital writes, "Gross margins of 45.7% were better than guidance of 45%. Net, pro forma EPS of $0.18 were better than the Street's $0.16. For 1Q12, management guided revenues to fall 8% QOQ to $1.56B, worse than the Street's $1.60B. Gross margins should track near 45%, as expected. Operating expense spending was guided better than expected at –2% QOQ. Net, our EPS estimate of $0.10 is in line with the Street. 32nm Llano supply increased 80% QOQ in 4Q11 and now comprises one-third of total processor shipments. Further, AMD's GPU shipments fell 5% QOQ, likely better than NVIDIA's GPU shipments (which likely fell more than 10% in 4Q11). New CEO Rory Read and company will host AMD's analyst day next week and we do think investors will positively receive management's refined strategy and additional business detail. Stepping back, we like shares of AMD, especially below $7, and think the stock trades very inexpensively on various metrics, and with still-negative investor sentiment." FBR Capital maintains its Outperform rating and $10 price target on Advanced Micro Devices, which is currently trading up $0.19 from yesterday's $6.53 closing price.