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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 231.94+0.1%Jan 20 3:59 PM EST
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To: Petz who wrote (200539)6/5/2006 11:30:28 PM
From: brushwudRead Replies (2) of 275872
 
I'm the only one showing Intel with a loss, based on a writeoff of $600M. But Operating Income would be barely positive anyway.

Last Q they sold $8.9 billion and gross margin was 55% for gross profit of $4.9 billion and expenses were $3.2 billion, leaving operating income of $1.7 billion. This Q they guided to sales of $8 billion and gross margin of 50% for gross profit of $4 billion and expenses would be at least $3 billion, which should leave operating income (pre-tax) of $1 billion. We can safely assume that expenses won't change much, so for them to have "barely positive" operating income, you must think sales or margin will be even worse than they said. Three possibilities: your arithmetic is a bit off, they're not telling the truth, or they made a billion-dollar honest mistake.

JMHO, and the 600M would not be for layoffs/asset sales -- probably too late for that to close before Q2 ends.

What would the writeoff be--inventory? With gross margin of 50%, they have a lot of room to cut price to move it without writing any off. I think they can write off goodwill and a layoff at noon on July 19 if they want, not necessarily before the end of Q2, and report it after the market closes that day. But for now, the silence is deafening.

The longer this drags out, the better for AMD.
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