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Technology Stocks : AMD:News, Press Releases and Information Only!

AMD 203.76

-1.1%

3:59 PM EST

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To: greg nus who wrote (3715)	1/13/1998 5:46:00 PM
From: Larry Loeb	Read Replies (2) of 6843

greg, My understanding of the comments were that there were order cancellations for 3 million cpus (for notebooks). If this is the case, there would be no CoGS charge or revenue recognition. There would only be an additional 3 million cpus to be sold to other vendors. As these are likely to be the latest chips, there would be no writedown. To the best of my understanding, Intel does not take returns of CPUs. That would be the only situation where your scenario might be possible. It is highly unlikely, even then, that the market value of CPUs would be lower than Intel's cost. In any event, INTC reported a slight finished goods inventory increase from $401 million to $514 million. I haven't done the turnover ratios, but it doesn't seem out of line. Certainly the Asia situation has created problems for Intel, but they appear manageable. By the way, I was happy to hear that AMD's numbers were better than projected (like INTC's). We can all look forward to some good price action tomorrow. Larry

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