Paul,
I disagree with your assessment. I thought Pez's analysis was terrible. I believe, it was selective, deceptive, and disguised to put Intel's revenues into a poor light. Certain facts were omitted and the "Comments" presented, were his, not Intel's.
Actually, Intel changed its reporting structure, in how they defined their two Operating Segments, between the first and second quarter of 1999. In my opinion, although the breakout of the Segments were restated, because of the reshuffling of what was included in the reporting Structures, and different incentives, it is difficult to draw definitive conclusions from a comparison. I do think however, that analysts will focus on this comparison in the days to come. Therefore, I have reprinted below exactly what was presented in the Intel Q2 earnings report.
Regards to All,
Jules
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"<OPERATING SEGMENT INFORMATION:
Intel Architecture Business Group:
Revenues 5,559 6,429 11,988 5,240 10,655
Operating profit 2,305 2,944 5,249 1,649 3,509
All other:
Revenues 1,187 674 1,861 687 1,273
Operating (loss) 15 (307) (292) (43) (122)
Total:
Revenues 6,746 7,103 13,849 5,927 11,928
Operating profit 2,320 2,637 4,957 1,606 3,387
In the first quarter of 1999, Intel had two reportable segments: the Intel Architecture Business Group and the Computing Enhancement Group. During the second quarter, Intel changed the structure of its internal organization, moving the chipset operation and the graphics chips operation to the Intel Architecture Business Group from the Computing Enhancement Group. This change was made to better align the product planning and marketing strategies of the company's component operations. As a result, the second quarter information has been presented with the Intel Architecture Business Group as the only remaining reportable segment. Information for prior periods has been restated.
The Intel Architecture Business Group now includes microprocessors, motherboards, other board-level products, chipsets, and graphics chips.
The "all other" category includes revenues and earnings (losses) from non-reportable operating segments: the remaining embedded processor and flash memory operations of the Computing Enhancement Group, the Network Communications Group and the New Business Group. In addition, "all other" includes certain corporate-level operating expenses (primarily the amount by which profit-dependent bonus expenses differ from a targeted level recorded by the segments) and reserves for deferred income on shipments to distributors not allocated to operating segments. For the second quarter of 1999, approximately $400 million of the change in revenue in the "all other" category is due to the impact of the reserve for deferred income on shipments to distributors and other corporate reserves.">
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