Advanced Micro Devices - Moderated (AMD) Message Board

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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: Joe NYC who wrote (85242)	7/17/2002 7:33:33 PM
From: Robohogs	Read Replies (1) of 275872

Thanks Joe, I actually missed your point earlier but it is correct but it has a seriously bad impact on current earnings. The indirect expenses generally only get applied to finished goods (those sold and built into inventory) so that if one stops just short of completing the chip, these costs get divided over a smaller base, and more ends up being pushed into current expenses (since chips both made and sold in the quarter is a higher percentage than it would be if one completed more chips in inventory). That could be part of reason for such large loss in this quarter. I still wonder what happened to cause other comprehensive income on the balance sheet to swing $180 MM or so and offset the current quarter loss in the equity account. A long term currency hedge could be part of it (remember AMD has 100% dollar revenue since most tech products based on USD market and its pricing and significant euro cost so that AMD would have hedged against a move down in dollar increasing dollar cost of the German production) but $180 MM is a lot. Something else going on here. Jon

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