Back to top

Analyst Blog

Advanced Micro Devices, Inc. (AMD - Analyst Report) is set to report first-quarter 2014 results on Apr 17. Last quarter, it posted in-line results. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Advanced Micro’s fourth-quarter earnings of 6 cents were in line with the Zacks Consensus Estimate due to higher revenues. Revenues were up 8.8% sequentially and 37.6% year over year. The solid growth was driven by strong performance in the Graphics and Visual Solutions segment, higher revenues from semi-custom System-on-Chips (SoCs) and ramp up of the new R7 and R9 series of GPU products.

However, gross margins of 34.8% decreased sequentially but were up significantly from the year-ago quarter. The sequential decrease was due to unfavorable mix and higher-than-expected operating expenses.

For the first quarter, AMD expects revenues to decrease 16.0% (+/- 3.0%) sequentially. Non-GAAP gross margin is expected to be 35.0%. Operating expenses are expected to be approximately $420.0 million.

Earnings Whispers?

Our proven model does not conclusively show that AMD will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 0 cent. Therefore, the ESP for the stock is 0.00%.

Zacks Rank: AMD sports a Zacks Rank #1 (Strong Buy) which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

You could consider other stocks with a positive Earnings ESP and Zacks Rank #1, 2 or 3 such as:

E-Commerce China Dangdang Inc. (DANG - Snapshot Report), with Earnings ESP of +33.33% and a Zacks Rank #1 (Strong Buy).

ON Semiconductor Corp. (ONNN - Analyst Report), with Earnings ESP of +6.67% and a Zacks Rank #1.

Yelp, Inc. (YELP - Snapshot Report), with Earnings ESP of +33.33% and a Zacks Rank #2 (Buy).

Read the Full Research Report on ONNN
Read the Full Research Report on AMD
Read the Full Research Report on YELP
Read the Full Research Report on DANG

Zacks Investment Research

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%