AMD Q2 Earnings Report Preview, Losses But Not So Much
With the second quarter of 2016 ending, it’s time for companies to start declaring their earnings over the last few months. While there has been no official declaration from AMD, according to analysts the company might once again be in a loss although it will not be as significant as it has been reporting over the past few quarters.
Throughout the year, AMD has been increasing their portfolio and has been pretty active on the corporate side of things with multiple joint ventures and acquisitions. The company even made a $293 million licensing agreement with THATIC towards their IP monetization strategy through which they are set to receive $25 million this quarter.
AMD will also be receiving $320 Million (net of tax and other expenses) from the NFME Joint Venture (ATMP) which will be lowering future capital expenditures of the company and increasing cash and other equivalents to $950 Million.
The real test of the company will however be with their introduction of Zen CPU line up. The company is under more than $2 billion in debt and they absolutely need Zen to be successful since a huge sum of this debt is due by 2019.
The recent introduction of RX 480 didn’t really offer any competition against the high end products Nvidia announced recently but it targeted a bigger and mainstream market, which Nvidia will be countering with its release of GTX 1060 so it remains to be seen how much the company’s latest GPU offering benefits it in the long run.
Since the announcement and launch of RX 480, AMD’s stock more than doubled. Analysts even went ahead and gave the “Buy” go head towards AMD stocks, which were previously at “Hold” since the middle of 2015. After the quarterly earnings, in which AMD is expected to report a loss of 8 cents per share, their profits are expected to rise.
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