CJ:
Remember, earnings will be substantially effected by the "Ekhardt" reserve. The company estimated this to be 2B six months ago. I think approx. 700MM was written off last quarter. That leaves 1.3B. I assume most of this reserve is for termination of employees. Yes, it cost money to fire people. But as far as I can tell, only 1600 + 100 have been fired. On the other hand, :), remember alta vista? I estimate (wag) that that puppy was about a $200mm annual drainoruski, which is now gone. So one quarters worth is about $50MM extra income (or rather a nondeduction). Accounting rules allow the Company to stop taking loses on a division when the decision is made to sell it, not when it was actually sold.
The Seattle Alpha/NT effort saves, I have been told, $300MM a year, but this may be a wash, the cost of closing it will probably get charged to the reserve.
There will be two numbers to keep an eye on, gross unit growth of small PCs (profit will not be much imo because of the costs of focusing the line to gain market share) and corporate sales. This latter will be the Biggee that tells the tale.
Stay Tuned.
Best,
Duke |
