John,
I've never heard anyone say "it was a "pre-tax" blow out quarter!" The money is gone, the feds have it, get it?
It's not about paying taxes vs. not paying. It is about managing expectations. I don't think AMD owes any taxes yet, but the projection is that in the following 2 quarters, there will be some taxes owed.
There could be a scenario that AMD just exhausted the tax credits. Imagine that AMD reported $1.51, and the next quarter it goes up to $2.00. But since the credits have been exhausted, the 34% tax rate applies, and AMD reports $1.28 taxed.
Rather than doing it this way, AMD set aside some money as a reserve for future taxes to be paid, in order to create an orderly rising earnings quarter after quarter.
What people on this thread have a problem with is that the analysts were guided to expect 0% tax rate, and all their estimates reflect that, so that AMD performance based on the taxed amount looks just OK, not a near blowout earnings that AMD in reality had.
I think what complicated things was the sale of the communication division, which will probably generate capital gains for the year, hence the tax credits were exhausted sooner than expected.
Joe |
