Feeds

Analyst sounds AMD cash-flow warning

Chip maker about to be bought?

Secure remote control for conventional and virtual desktops

A US analyst has expressed "increasing concerns" that AMD is heading toward a cash-flow crisis even a shareholders' ears prick to whispers that a private equity company is looking to buy a stake in the chip maker - or even the whole kit and kaboodle.

AMD's cash flow was questioned yesterday by American Technology Research analyst Doug Freeman, who told the firm's investor customers: "We were surprised to see AMD shares rally yesterday given what we believe to be increasing concerns about cash flow at the company... we think management will be forced to come to the capital markets for operating cash before the end of the summer."

AMD's shares yesterday opened at $14.83 and closed at the same price. During the day, the shares peaked at $15

The lift was due to the buyout rumour, Freeman said. "When we polled clients as to the reason behind the strength we were told that private equity rumors were circulating. While we do not doubt that private equity is sitting on cash it needs to put to work, we have a hard time seeing how it would get involved in AMD at the present valuation."

Freeman has AMD stock rated as 'sell'. His prognosis: "We advise investors to limit their exposure to AMD shares until cash is raised and new product benchmarks are made available."

AMD lost $166m in its 2006 fiscal year because it bought ATI. But it ended the year with $1.54bn in cash, down from $1.8bn at the end of FY2005. That's less than AMD's Q4 FY2006 revenue - $1.77bn, down from $1.83bn in the year-ago quarter.

The essential guide to IT transformation

More from The Register

next story
Apple's iWatch? They cannae do it ... they don't have the POWER
Analyst predicts fanbois will have to wait until next year
The agony and ecstasy of SteamOS: WHERE ARE MY GAMES?
And yes it does need a fat HDD (or SSD, it's cool with either)
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Apple to build WORLD'S BIGGEST iStore in Dubai
It's not the size of your shiny-shiny...
Just in case? Unverified 'supersize me' iPhone 6 pics in sneak leak peek
Is bigger necessarily better for the fruity firm's flagship phone?
Steve Jobs had BETTER BALLS than Atari, says Apple mouse designer
Xerox? Pff, not even in the same league as His Jobsiness
Apple analyst: fruity firm set to shift 75 million iPhones
We'll have some of whatever he's having please
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?