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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (70443)	11/12/1999 11:33:00 AM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

To All, Dell and Cisco eps fantasy fiction make me say "hmmmmmm!" These two touty cos. bring up a point that should be aired, but for which I have no real answer. Both Cisco and Dell had negative earnings growth this quarter when takeover and purchased research costs are factored in to the mix. O.K., I am not an accounting fascist on this issue. It is obvious that a takeover or purchased research should not all be piled on the quarter when they occur. That would be unfair to the cos. However, the way they report it now, it is unfair to gullible shareholders and analysts. The current standard is, "oh, yeah, we have these costs, but they don't count." Folks, they definitely do count. Perhaps they should be spread over several quarters, but a cost is a cost. By using the "pay no attention to the costs behind the curtain" method, the income from such deals comes in without the expenses attached, greatly overstating "operating income" for this and future quarters. Yes, there is often some sort of pro forma lip service, but the story the cos. tell in the headlines is the most overstated to the positive side. So, my point is, there must be some way to record these costs without either over penalizing or over boosting eps. The cos. have chosen the latter, but they are not indicative of what is happening at these firms.