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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 246.28+4.0%3:59 PM EST
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To: kash johal who wrote (2215)7/25/2000 5:03:22 PM
From: pgerassiRead Replies (1) of 275872
 
Dear Kash:

Re: Intel sleight of hand with respect to disti.

You should notice that Other revenues rose by the same amount that IAG revenues declined after adjustment. Thus, a reserve in Other is inverted (slush fund?) in IAG. Therefore Petz's accusation is brought out by the facts as you quoted them. IAG 2Q (6952-6760=192) vs Other 2Q (1348-1540=-192). IAG 2Q99 (5559-5850=-291) vs Other (1191-900=291). Overall revenues were no different but IAGs Profits in Q2 were exaggerated in 2000 but reduced in 1999 (AMD was weak in 1999 but strong in 2000!).

Of course this reserve may be just a convenient fiction, but since there is a line in AMD's balance sheet that appears similar and that means those revenues not yet realized, finalized, as revenue, like AR, Intel seems to do the right thing in the overall numbers BUT NOT FOR IAG OPERATING PROFITS.

If this factor is pulled from their IAG profits, their GM is only 45% in Q2-2000 and the same in Q2-1999 (a telling point since motherboards and chipsets accounted for more revenue in 1999 than 2000 relatively). Perhaps next year they will restate this year back to even to reduce this year by 192 million (or more) to make Q2 2001 look good (rapid rise in operating profit).

To check if they keep restating this "reserve", it might be nice to see what they claimed revenues for Q2 1999 in that Q2 report last July. Anyone have the original report?

Pete
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