Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: steve harris who wrote (104001)	4/11/2000 8:23:00 PM
From: Petz	of 1577073

We made .43 last quarter and only increased revenues 10%. How are we going to increase earnings 69% to meet .70? Magic? The magic is that if revenues are up nearly $100M, earnings will be also, because the semiconductor business is mostly a fixed cost business. AMD's workers didn't have to work many more hours to get that additional 10%. Their raw material costs were about the same. Their leases were the same. At the Q4 conference call, AMD gave guidance as to how much various expense items would go up (or down) from Q4 to Q1, actually they even estimated it for all of Y2K. The "breakeven" point for Q4 (sales - profits) was $903M. Based on what Sander's and the treasurer said in the CC, the expense level may only rise by $30M-$60M. So a revenue increase of $100M will give a profit increase of $40M to $70M, for earnings of $105M to $135M or 0.69 to 0.88. Petz

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