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Technology Stocks : Micron Only Forum
MU 241.14-6.7%Dec 12 9:30 AM EST
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To: davesd who wrote (17307)8/7/1997 10:30:00 AM
From: Thomas G. Busillo   of 53903
 
Dave, here's the adjustment I was referring to:

"During the fourth quarter of fiscal 1996, the Company charged
operations with a $9 million accrual relating to revisions of estimates for selling costs associated with sales of PC systems..."
SOURCE: MU 10-K (FY 1996)

So that adjustment may impact pre-tax margins.

Since they got their "estimates of selling costs" wrong enough to make a $9 million revision, who's to say this won't happen again?

Also, I find the following kind of interesting:
"Cost of goods sold includes estimated costs of settlement or adjudication of asserted and unasserted claims for patent infringement prior to the balance sheet date and costs of product and process technology licensing arrangements."

I look at that and a few things strike me:
A. Estimated costs of litigation being used to get a number that ties into gross margin calculations.
B. Unasserted claims.

Both are "estimates".

For me, that calls into question the quality of their earnings.
And let me make this clear, I DON'T think this some intentional malfeseance on their part. In fact, they're actually going out of their way to say, "look there's some stuff in the future happening and this is our best guess at the moment."

But, obviously somtimes guesses are wrong.

Link is:
sec.gov

Good trading,

Tom
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