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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 214.11+3.9%Nov 26 3:59 PM EST
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To: niceguy767 who wrote (35799)4/15/2001 12:32:27 PM
From: Dan3Read Replies (2) of 275872
 
Re: forecasted INTC results to be reported Tuesday...

The thing to keep in mind in any capital intensive industry is that there are a lot of opportunities for accounting games. When the true value of your assets depreciates very quickly, losses can be masked by not accounting for that depreciation - unless the day comes that those assets must be liquidated, and they turn out to be worth pennies on the book-value dollar.

For last year, AMD showed undepreciated plant and equipment valued at $2.6 Billion, an increase of $.1 from the previous year. Intel showed undepreciated plant and equipment at $15.0 Billion, an increase of $3.3 Billion. Yet Intel has come into the year with an urgent need for major capex, while AMD is just completing a huge capex program and can scale back its capex, near term.

Undepreciated plant and equipment is a deferred cost - it represents money you spent but didn't figure into your costs. By calling more and more of its expenditures capex and not depreciating its old plant, Intel is able to greatly reduce paper costs and continue to show operating profits even when it is losing $Billions.

By the way, you can find Paul actively posting on the Intel thread at
Subject 549
if you want to discuss anything with him.

Regards,

Dan
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