Talk of CEO Change Swirls at AMD
And the big bet that AMD made by acquiring graphics-chip maker ATI for $5.4 billion in 2006 has yet to prove its worth. The first real fruits of the union aren't due until 2009, when AMD releases its so-called Fusion processor, which integrates computer processing and graphics acceleration on a single chip.
In the meantime, the rich -- some say excessive -- price that AMD paid for ATI has saddled the company with massive debt and restructuring charges at a time when profit margins are being squeezed by competition with Intel.
In the last three quarters, AMD lost roughly $1.6 billion combined -- and it's not clear when the company will return to break-even.
Still, the surest formula for a change may not involve Meyer replacing Ruiz: both men are part of the current management team and are said to have equally favored the ATI acquisition.Ruiz also may be unwilling to end his term on a low note. "Hector is a guy that loves to fight. He's not going to retire on a downturn," says the source. As Ruiz soldiers on, all eyes will be on his presentation to analysts next month, where the CEO will bear a heavy burden to articulate a cogent comeback plan. Among the most pressing questions are AMD's manufacturing strategy and its ugly balance sheet, say analysts. AMD has been tight-lipped about details to outsource more of its chip fabrication to third-party manufacturers, even as it claims to be moving forward with the plan. Given how central the project is to the company's finances, investors may not be willing to give AMD the benefit of the doubt much longer without seeing signs of progress. Ruiz has earned the Street's trust with his past performance. But the future will hinge on results.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV