We all knew it was coming, but it's still no fun when the numbers roll in. When AMD
A hefty $550 million of ATI-related integration costs, plus significantly lower gross margins as the AMD-Intel
Is this a good time to panic and sell all your AMD stock? Of course not.
Fine, go ahead and sell if you're bound and determined to lock in your losses. If your nerves can't handle the occasional downturn, especially when it's based on widely expected news, you shouldn't be holding volatile tech stocks anyway. Grab a 30-day free trial of Income Investor or Champion Funds, where stable, predictable results are celebrated. I'm more of a Rule Breaker myself, with an eye for major growth opportunities, and I think that AMD's management has a similar outlook.
"We believe we once again gained microprocessor unit share in the quarter, as we did in the year, by continuing to execute against our customer acquisition strategy and our product, technology, and manufacturing plans," said CFO Robert Rivet in one especially long sentence. "We need to improve our financial performance relative to what we delivered in Q4. We will do so by delivering improved products, lowering our manufacturing costs, increasing our operating efficiencies across all disciplines, and continuing to grow share."
Remember that AMD has a long history of playing the underdog, nipping at Intel's sizable heels. Low margins and tough competition are nothing new here. The firm is content to sacrifice short-term results for a stronger market share. There's also a good-looking quad-core processor in the works, based on a new microarchitecture, and it has the potential to grab the performance crown back from Intel.
AMD says that the process of integrating ATI is "already largely behind us," and there should be no more large surprises on the income statement. When the likes of Motorola
AMD understands that long-term results matter more than short-term earnings management. That same sort of attitude made companies like Cisco
As always, Fools should do their own homework and make up their own minds. Still, I believe that my money is more than safe with AMD -- it's in downright good hands. I only wish I could get more of its shares at this bargain-basement price.