By
Anders Bylund (TMF Zahrim)
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More Articles
January 18, 2008
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On Jan. 17, processor peddler Advanced Micro Devices (NYSE: AMD ) released earnings for the 2007 fiscal year, which ended Dec. 29.
- Back out noncash goodwill impairment charges of $1.61 billion in the fourth quarter and ... well, 2007 still doesn't look good. Sans that massive item, the operating margin for the year was around (21%), and the net margin would be (29.4%).
- A $614 million investment from a Dubai-based investor group helped stabilize the balance sheet, though AMD had to dilute the stock to meet its end of the bargain. And a heavy debt load still hangs over the company like the sword over Damocles.
- On the bright side, AMD had $114 million of positive operating cash flow in the fourth quarter and came within $9 million of breaking even on a non-GAAP operating basis.
(Figures in millions, except per-share data. Data uses the latest reported numbers from Capital IQ, a division of Standard & Poor's.)
Income Statement Highlights
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FY 2007
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FY 2006
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Change
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|
Sales
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$6,013
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$5,649
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6.4%
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Net Profit
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($3,379)
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($166)
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(1,935%)
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Earnings Per Share
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($6.06)
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($0.34)
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(1,682%)
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Diluted Shares
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558
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492
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13.4%
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Get back to basics with the income statement.
Margin Checkup
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FY 2007
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FY 2006
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Change*
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Gross
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37.6%
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50.0%
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(12.4)
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Operating
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(47.7%)
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7.6%
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(55.3)
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Net
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(56.2%)
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(2.9%)
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(53.3)
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*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
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Assets
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FY 2007
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FY 2006
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Change
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Cash Plus Short-Term Investments
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$1,889
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$1,541
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22.6%
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Accounts Receivable
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$640
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$1,140
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(43.9%)
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Inventory
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$821
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$814
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0.9%
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Liabilities
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FY 2007
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FY 2006
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Change
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Accounts Payable
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$1,009
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$1,338
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(24.6%)
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Long-Term Debt
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$5,031
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$3,672
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37.0%
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The balance sheet reflects the company's health.
Cash Flow Highlights
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FY 2007
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FY 2006
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Change
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Cash From Operations
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($257)
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$1,287
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N/A
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Capital Expenditures
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$1,686
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$1,856
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(9.2%)
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Free Cash Flow
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($1,943)
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($569)
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(241.5%)
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Owner Earnings
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($2,356)
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($1,231)
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(91.4%)
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Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap
|
Trailing P/E Ratio
|
CAPS Rating
|
|
Intel (Nasdaq: INTC )
|
$113,490
|
16.5
|
****
|
|
Texas
Instruments (NYSE: TXN )
|
$41,470
|
17.0
|
****
|
|
NVIDIA (Nasdaq: NVDA )
|
$13,780
|
21.6
|
*****
|
|
Broadcom (Nasdaq: BRCM )
|
$12,770
|
81.70
|
***
|
|
AMD
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$3,910
|
NA
|
**
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Keep your partners close and the competition in your vest pocket.
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