Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Mani1 who wrote (115037)	6/8/2000 5:52:00 PM
From: kash johal	Read Replies (1) \| Respond to of 1572383

Mani, re: "tax effect" Scenario: AMD blows away earnings estimates this quarter even after small tax payment. AMD offers positive guidance for 5-10% sequential growth in Q3 and Q4. The DUMBASS analysysts figure out that earnings for Q3/Q4 will be up 10-15% but then reduced by 33% due to taxation. VOILA earnings estimates for Q3 and Q4 are REDUCED. And the stock price TANKS!!! And the shorts and hedge biys short like hell to really dump the stock. Seems like a plausible scenario to me. regards, Kash

To: Mani1 who wrote (115037)	6/8/2000 6:01:00 PM
From: tejek	Read Replies (1) \| Respond to of 1572383

Ted re <<my concern is that next year's taxes will be higher that previously thought and will act as a drag on earnings.>> Taxes are percentage of earnings, with increasing percentage only on the increasing incremental earnings. If taxes will be higher, it means earnings will be higher. It is very good news. Mani, Not good news....the taxes AMD pays next year will be for the increased earnings in 2000. In other words much higher taxes than this year's (which is for last year's earnings). ted

To: Mani1 who wrote (115037)	6/8/2000 6:38:00 PM
From: RDM	Respond to of 1572383

If taxes will be higher, it means earnings will be higher. This is true but not the concern. AMD has paid low tax this year because they lost money in the past and have a Tax Loss Carry-forward. By my estimate some of the Q2 earning may be subject to tax, depending upon how much profit they make. Once the Loss Carry-forward is finished, they begin to pay big-time taxes and that can be >30%. If AMD earns 60% more next year, than this the after tax earnings only increase 30%. The fear is justified however I believe they have earnings "headroom" and the future earnings power of AMD is enormous. If AMD has 30% of the sales Intel they should have 30% of the after tax profits ($2.4B) as well IMHO. This is a long way from were the earnings are today.