Colgate-Palmolive Company (CL), Windstream Corporation (WIN), Advanced Micro Devices, Inc. (AMD): Dissecting Debt at Three Companies

Uncontrollable debt situation
Advanced Micro Devices, Inc. (NYSE:AMD)‘s  debt does not look to be a significant issue for the company, standing at 7.1 times EBITDA. However, the company was unable to cover its interest costs during the second quarter of this year, and cash burn is quite significant: The company burned through $770 million in cash during 2012, and so far this year the company has burned through $200 million with no noticeable inflows.

Advanced Micro Devices, Inc. (NYSE:AMD) does has $1 billion in cash, which should cover the $780 million debt issue maturing in 2015, but with such a rapid rate of cash burn, I do not believe this cash will be available by the time the debt matures.

Shareholder equity has fallen 33% during the first six months of this year, which is not a good sign.

All in all, Advanced Micro Devices, Inc. (NYSE:AMD)’s debt pile looks uncontrollable, and the company will have to work hard to stop cash burn and save for debt repayments.

All in all, these three companies are in difficult positions. Colgate-Palmolive Company (NYSE:CL) will be able to sustain its debt, but only if it cuts payouts to investors. Windstream Corporation (NASDAQ:WIN) is somewhat unpredictable, and debt is rising rapidly, while Advanced Micro Devices, Inc. (NYSE:AMD) is burning through cash.

One thing is for certain: The future is uncertain for Windstream Corporation (NASDAQ:WIN) and Advanced Micro Devices, Inc. (NYSE:AMD), and that’s not good for investors.

The article Dissecting Debt at Three Companies originally appeared on Fool.com and is written by Rupert Hargreaves.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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