Paul and Exciton are both wrong about 100M loss. FASL, the flash memory joint venture, was profitable in the 1st quarter, to the tune of 15,998,000. The reason its shown as a negative number on line 3 of the "Non-GAAP" consolidated statement of operations is because its listed as a negative EXPENSE. You will note further down in this statement that AMD accounted for taxes of 8,252,000 on these profits. The true pre-tax loss is 89,872,000 not 100M as you claim. Offsetting this amount is 34,145,000 of tax credits.
It is very significant that the tax credit % is only 38%, much less than Q4'97 (63%). In the CC, they said that this was so that provision for taxes in future quarters could be "moderated." THIS WOULD NOT BE NECESSARY IF AMD DID NOT EXPECT TO POST A 1998 FULL-YEAR PROFIT.
The businesswire statement includes the standard "GAAP" statement as well, but the GAAP treatment of equity investments is more difficult to understand because you can't see pretax gain or loss which includes the joint venture. Its really more appropriate for smaller passive equity stakes, not joint ventures.
Petz |
