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

To: tejek who wrote (123015)	8/23/2000 11:23:48 PM
From: Eric K.	Read Replies (1) \| Respond to of 1579753

Ted-- There is a general tendency on the part of certain threads and their denizens to tear apart the balance sheets of Cisco, IBM, and quite a few of the other Nasdaq 100 love spawn. The basic criticism is that the earnings number is manipulated by contortions of the income statement and balance sheet-- in terms of toying with intangibles, shifting revenue or expenses to places they do not belong, not including the Black-Scholes value of options grants against earnings, counting large non-sustainable, non-predictable, and non-recurring one-time items as earnings, exempting merger expenses from earnings, etc. In other words, although the actual items in the income statement are legitimate, the way things are broken down and accounted for to derive the final earnings number is deceitful, and since analysts are exceedingly lazy, they don't bother to analyze the way that the earnings number has been derived. -Eric

To: tejek who wrote (123015)	8/23/2000 11:33:19 PM
From: chic_hearne	Read Replies (1) \| Respond to of 1579753

ted, It looks like Eric already answered your question. And no, it's not just a problem I have with Cisco. Many tech companies have cooked books. In my opinion, you can't keep improving earnings exponentially when you are cooking the books. You run out of tricks if you know what I mean. For example, Intel's 2001 estimates are for profits of $1.5 billion higher than this years estimates. We already know that Intel has taken over $3 billion in one time gains from stock sales in the first 2 quarters this year. This means next year in order for Intel just to meet estimates, they are going to have to come up with $4.5 billion in profit assuming the core business has flat earnings. While I doubt the earnings from the core business will be flat, I highly doubt they will be $4.5 billion higher than this year. There are many companies in this same situation, it is far from just an Intel or Cisco problem. Eventually, I think this will be one of the leading causes in killing the Naz and maybe the whole market. IMO, there's nothing wrong with cutting through the BS the ANALysts are pushing and tearing through financial statements yourself to see what's really going on. chic