Advanced Micro Devices’ struggles are continuing, with the chip maker adopting a restructuring plan that will include cutting about 5 percent of its workforce, or 500 jobs.
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The one interesting thing that we found in the restructuring details is that AMD plans on outsourcing certain IT and application development services. The company will take a charge of $42 million, with $41 million of that recorded in the just-ended third quarter. The Company anticipates savings of approximately $58 million in fiscal year 2016.
“The savings from the Plan are anticipated to be approximately $2 million and $7 million in the third and fourth quarters of fiscal year 2015, respectively”. The firm had revenue of $942 million for the quarter, compared to analyst estimates of $952.64 million. The sell-side firm believes that the restructuring plans will be completed by the end of fiscal year 2016. AMD shares are up more than 2 percent to $1.77 today, but they are down about 46 percent since February despite occasional sharp increases because of takeover rumors.
SAN FRANCISCO Advanced Micro Devices has joined the list of large semiconductor companies handing out pink slips.
We rate ADVANCED MICRO DEVICES (AMD) a SELL. At its highest in mid-2000 during the early Athlon days, shares were trading at more than $92. The firm’s market capitalization is $1.36 billion. The company’s weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
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In the first half of this year, AMD slipped from IHS’ top 20 semiconductor vendors list after six consecutive quarterly losses. Finally, Zacks raised Advanced Micro Devices from a “hold” rating to a “buy” rating and set a $3.00 price objective for the company in a report on Wednesday, June 24th. The Company offers x86 microprocessors, as standalone devices or as incorporated as an accelerated processing unit (APU), chipsets, discrete graphics processing units (GPUs) and professional graphics, and server and embedded processors, dense servers, semi-custom System-on-Chip (SoC) products and technology for game consoles.
