Groundhog Day in Chip-Land: AMD Loses Another CEO (AMD, INTC)

Advanced Micro Devices, Inc. (NYSE: AMD) set CEO Dirk Meyer up for failure from his first day on the job.  After the close came the announcement that Meyer was resigning in mutual agreement with AMD’s board of directors.  AMD is appointing Senior Vice President and CFO Thomas Seifert, who is 47 years old, as interim CEO.  The board has also begun a CEO Search Committee, led by Bruce Claflin, Chairman of AMD’s board of directors.

Meyers succeeded Hector Ruiz, but he was effectively handcuffed into much of the same strategy that had been in place for years.  If that was not the case, that was what was the general message at the time he started.  Ruiz had been a CEO we called upon for a resignation for quite some time.  A duplicate strategy was not going to cut it.  Was this a firing or a resignation? Call it one and the same.

AMD enjoyed a brief lead over Intel Corporation (NASDAQ: INTC) in dual-core processors.  That lead was very short-lived and things have never been the same since.  The AMD settlement with Intel might have been for far too little and the world is moving beyond AMD’s single offerings.  Before that, its Fab-Lite move was meant to help out but the gains have not been seen as far as any major gains that would make a huge difference to shareholders.

AMD did offer up some guidance.  Preliminary results for the fourth quarter 2010 showed that revenues rose 2% sequentially to approximately $1.65 billion and gross margin was listed as roughly 45%. Thomson Reuters has estimates of $1.62 billion for the quarter.  Lastly, AMD reaffirmed its 2011 annual financial guidance as disclosed at its Financial Analyst Day last November.

The company is also trying to convey that its ‘Llano’ APU and 32nanometer ‘Bulldozer’ based processors remain on track.

AMD shares closed up 4.1% at $9.19 today, but AMD’s after-hours shows shares down 3.8% at $8.84 as the initial reaction.  No major gains, more of the same.

JON C. OGG