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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 215.00+0.5%Dec 22 3:59 PM EST
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To: Petz who wrote (2166)7/25/2000 11:17:16 AM
From: THE WATSONYOUTHRead Replies (2) of 275872
 
Re: "Why does Intel even bother reporting profits for its two main divisions seperately if its going to mix up the costs?"

I agree. This is clearly done to mask the true performance of the individual divisions. Intel knows that the most important number is the aggregate profit. That won't change regardless of how reported. Beyond that, the most important thing is to show good performance in IAG. As you have pointed out, Intel has used "distributer deferral" and "certain corporate level operating expenses" to pad IAG
revenue and transfer IAG costs to other groups. Most likely, the large increase in losses incurred by the non IAG groups
corersponds to an actual (if reported unambiguously) decrease in profitability in IAG. Intel knows that they have a free pass on the non IAG areas for at least another year and so play these games. This is OK if things don't get any worse. But, as things are now, with this dubious method of reporting, they claim for this quarter $850 million losses on just $1350 million revenues for the non IAG areas. What could they do if things got worse? Report more losses than revenue in non IAG areas?? Even the analysts may pick up on that.

THE WATSONYOUTH
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