Advanced Micro Appoints New CFO - Analyst Blog
03 January 2013 - 8:50PM
Zacks
Advanced Micro Devices,
Inc. (AMD) recently announced the appointment of Devinder
Kumar as the new chief financial officer (CFO).
The new CFO has been associated
with AMD for the past 28 years and has served in the capacity of
corporate controller over the past 12 years. He was appointed
interim CFO four months back. According to a document filed
with the Securities and Exchange Commission, Kumar will now be
entitled to a one-time cash bonus of $125,000 and various stock
option grants.
Like other companies in the PC
business, AMD has also been hit by the slump in demand due to the
growing popularity of smartphones and tablets and other mobile
devices. AMD’s chief executive, Rory Read, showed his confidence in
Kumar and stated that the new CFO will play an important role in
driving the new business model in the near term and strengthening
AMD’s long-term financial foundation. Management believes that
Kumar will add value to its growth strategy and boost its balance
sheet.
The company has been laying off
engineers while looking for new markets for its chips as it faces
falling cash reserves. In October, AMD announced its plans to
eliminate 15% of its workforce. Last month, it announced its
intention to sell its 58-acre Austin campus in order to raise $150
to $200 million from the transaction.
AMD is the world's second largest
maker of microprocessors but it has been losing ground to its
larger rival, Intel Corp. (INTC). The company
reported a very poor third quarter, with a significant net loss
that was the combined effect of weak demand, an inventory
write-down and productivity issues. The company’s third-quarter
sales of $1.27 billion were down 10.2% sequentially and also below
the consensus estimate of $1.28 billion.
In order to stay ahead of rivals
like Intel and NVIDIA Corp. (NVDA), we believe
that top management needs to execute its plans well and come up
with new ideas to generate more resources to invest into newer
business areas, site consolidations and Internet-related
opportunities (mainly cloud computing).
Advanced Micro is expected to
release its fourth-quarter 2012 results on January 22, 2013.
Currently, Advanced Micro has a
Zacks #3 Rank (Hold).
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