It must be a terrible feeling to wake up one day and find an article in the local newspaper, informing you that your neighborhood is now rated as a bad place to live or own property in. When the property in question is a small house, it’s not such a big deal. When it’s a billion dollar company, things are not so easily brushed aside.
On the heels of two other rating establishments, Fitch Ratings bumped Advanced Micro Devices, Inc. (NYSE:AMD) down to a single B rating. That means AMD is finding itself five notches below the dividing line and into junk territory.
The analysts expect AMD to continue to struggle in its operating performance and the outlook Fitch gave them has been ticked down from positive to just stable.
Considering how AMD have been doing this year, the rating comes as little surprise. AMD is frowning at its own performance in its reports and has internally projected a shrink of 1-4% for Q3 of 2012. AMD filed their 10-Q report for the second quarter and the figures in that are discouraging:
- net revenue $1.4 billion ($172 million down from previous quarter)
- computing solutions revenue 7% down
- graphics solutions revenue 4% down
Once again, the 10-Q manages to mention that Intel’s practices may prevent AMD from competing effectively. That didn’t stop them from hiring Biswamohan Pani, a former Intel employee who was sentenced to 3 years in prison last Wednesday for stealing sensitive Intel design documentation valued between $200 million and $400 million. AMD claimed that they had no knowledge of Pani’s previous job at Intel. A federal investigation, in which both big companies participated, concluded that AMD had not solicited the theft or used the documents stolen in any way.
Hopefully, newly appointed Chief Sales Officer John Byrne can help AMD stabilize. While the company struggles to master the mobile market’s challenges, the stock may continue its uncertain fluctuations.
