John, RE: the 17½ gain
A couple of thoughts along those lines:
First, this reversal does not affect cash flow at all. Thus, for the primary thing that I look at, there is no effect at all.
Second, although I agree with you that $600mm is not trivial, that amount reverses accruals that occurred over 2 years, so you're really talking about an impact of a little more than 2½/quarter.
Most important to me, third, you again correctly state that the market looks forward. And one thing that I found interesting is that guidance for the tax rate going forward was unchanged. Thus, whatever happened in '97 and '98 and was subsequently unwound is not affecting current margins.
In the end, I think the most logical conclusion is that Intel's market cap should now be 17½ more than we used to think, pretty close to irrelevant. |
