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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 203.14-0.8%Jan 9 3:59 PM EST
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To: aburner who wrote (4817)8/13/2000 11:27:28 AM
From: niceguy767Read Replies (1) of 275872
 
aburner:

Using JJ at SSB's top-down approach, I'm assuming:

(1) flash will contribute to bottom line in the same proportion as it has, on average, over the past 3 quarters.

(2) Athy margins will remain the same on average as the past 3 quarters.

It then follows that the 2 major variables (offset to some minor degree (i.e low margin, anyway) by reduced number of K6 shipments)are Athy margins and Athy incremental shipments...In Q2, Athy margins are estimated to contribute at the rate of $0.70 eps (pre tax)per million Athy's shipped or about $1.05 for the 1.8 million shipped...Assuming the same margins in Q3 and Q4, one would expect additional eps contribution, before tax, of $1.05 and $2.10 in Q3 and Q4 respectively assuming Athy shipment targets of 3.6 and 7.2 million units are achieved...resulting in a before tax eps of $2.56 and $4.66 rspectively (i.e. what Paul calls a slam dunk only I'm a little more conservative being based upon pre-split shares)...Even at the more conservative contribution rate of $0.50 eps per million shipped Athy's, incremental Q3 and Q4 before tax eps would be $0.90 and $1.80 respectively resulting in before tax Q3 and Q4 eps of
$2.40 and $4.20...And don't forget, flash prices are currently rising, not falling according to several sources!!!
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