Dear Kash:
On Intel Distributor Deferrals:
I think that in no way does AMD count this in. You do not consider things as sold when shipped to distributors but only when the product that is shipped to these distributors is sold to an end user. Since nothing can be "sold" to a distributor (at least at these kind of numbers ($192 million)), in no way should there be any revenues from these very same distributors included in operating profits or revenues. This number is usually kept, properly, in the balance sheet (AMD has it there in its Q2 report) and not in the income statement.
Since this is assumed by anyone related to this industry, Intel, or any other company, should not be allowed to break with this tradition. Otherwise, all this is noise and that is clearly not is what is desired by stockholders, "Wall Street", and the SEC. It is by the GAAP rules that show Intel with $0.90 (pre split) profit instead of $1.00 per share (in the Q2 report). AMD shows only one number, the one required by the SEC using GAAP, $1.21 (in the Q2 report).
I believe that the SEC, Congress, and us believe that all the companies should use the same standards in reporting their results so that valid comparisons can be made. And the SEC and us think that more information is desired than less. Intel, given the amount of profit and cash on hand should be able (a pittance really) to provide at least a reasonable attempt to allocate the operating expenses to the various divisions. The revenues should be easily distributed as this is very straight forward. Intel management, by most accounts at least decent, should already have this information and should be able to release the revenue, operating expenses, and qualify them by saying what is included in either for each division separately.
It is the right and proper way to do this.
Pete |
