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Politics : Formerly About Applied Materials
AMAT 249.89+3.1%Nov 26 3:59 PM EST
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To: Katherine Derbyshire who wrote (24448)9/20/1998 2:12:00 AM
From: Gottfried  Read Replies (1) of 70976
 
Katherine, there is a discussion of gross margin in the report. It
is not clear to me whether the decrease in GM is permanent.
Bold emphasis mine. This has been instructive.

Gottfried

GROSS MARGIN

Gross margin as a percentage of sales decreased to 18.5% from 27.4% for the six-month period of 1998 and 1997, respectively, and decreased to 19% in the second quarter of 1998 compared to 27.9% in
the comparable period of 1997. Product gross margin as a percentage of
product sales declined to 17.7% from 27.4% for the six-month period.
The decrease in product gross margin resulted primarily
from significant pricing and promotion actions taken in the North
American market to adjust the business model to meet the goals of
Compaq's Optimized Distribution Model over the six-month period.

Service gross margin as a percentage of service revenue increased to
33.7% from 27.1% for the first six months of 1998 and 1997, respectively, and increased to 31.3% from 26.4% in the second quarter
of 1998 compared to the same period in 1997. The increase in service
gross margin is primarily attributable to the inclusion of Digital for
the last two weeks of June.

sec.yahoo.com


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