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To: wanna_bmw who wrote (141805)	8/16/2001 8:10:17 PM
From: puborectalis	Respond to of 186894

Toshiba Chip Unit to Post Fiscal 1st-Half Loss, May Fire Staff By Minoru Matsutani and Yoshifumi Takemoto Tokyo, Aug. 17 (Bloomberg) -- Toshiba Corp.'s semiconductor business will post an operating loss in the fiscal first half, forcing the world's second-biggest chipmaker to consider firing workers in Japan as lower chip prices crimp earnings. ``Losses at our computer-memory chip business are extremely large,'' Takeshi Nakagawa, president of Toshiba's semiconductor business, said in an interview, without specifying how much the division expects to lose for the six months ending Sept. 30. Toshiba's semiconductor business, which makes chips for computers, mobile phones and digital cameras, had an operating profit of 72 billion yen ($600 million) in the first half a year earlier. The division accounts for 70 percent of Toshiba's operating profit and a fifth of the company's sales. Tokyo-based Toshiba may deal with losses at the division by reducing its workforce in Japan by firing workers or offering early retirement, Nakagawa said. The move is ``a corporate decision'' the company's board should take, he added. Prices of dynamic random-access memory chips, the main memory in personal computers, are hovering below production costs, resulting in losses recently at rivals such as Micron Technology Inc. and Hynix Semiconductor Inc. Toshiba, maker of the Dynabook and Libretto laptop computers, will reduce production of DRAMs by a quarter this month by closing a production line at one of its plants in Japan. Investors say the company needs to cut costs more. ``Investors are judging Japanese chipmakers like Toshiba by how drastically they propose to reorganize,'' said Ikuo Suzuki, a fund manager at Invesco Asset Management (Japan) Ltd., which holds Toshiba shares. Invesco manages 300 billion yen in Japanese stocks. Toshiba hasn't announced a profit forecast for its chip business in the first half. Achieving the division's full year profit target of 50 billion yen is ``absolutely impossible,'' Nakagawa said. The benchmark 128-megabit DRAM spot price is currently at $1.66 compared with an average of $6.48 the past year. To cope with lower prices, Toshiba may ally with foreign rivals to share DRAM development costs, Nakagawa said, without specifying possible candidates. However, Toshiba ``is not interested in teaming with Japanese companies,'' he said. Toshiba is currently developing memory chips for mobile phones with Infineon Technologies AG, the fourth-biggest DRAM maker. Toshiba, the sixth-biggest, doesn't have alliances with Samsung Electronics Co., Micron or Hynix, the three biggest DRAM makers respectively. The three companies account for 62 percent of global DRAM revenue.

To: wanna_bmw who wrote (141805)	8/16/2001 9:04:46 PM
From: Tushar Patel	Respond to of 186894

I liked what I read in some Warren Buffett book. If I understood it & remember it correctly, it goes something like this: When trying to analyze the performance of a company, you should exclude one-time charges when looking at annual numbers because this can easily make a company look very bad due to some one time problem when the underlying business is sound. However, to understand the long term performance & the trend, you can also take an average over a longer period, say 3 years. In that case, don't exclude anything.

To: wanna_bmw who wrote (141805)	8/16/2001 9:35:09 PM
From: Robert O	Read Replies (1) \| Respond to of 186894

I'll comment since I went back and forth with Pea on this issue. Nothing in the article refutes my assertion that the Street knows how to see through obvious differences in presentations. In fact, the article makes this point!! Companies have a great deal of freedom in what they can choose to exclude in crafting pro forma earnings. Small wonder that the definition of pro forma is "hypothetical." Companies report only their GAAP earnings -- not the pro forma earnings -- to the Securities and Exchange Commission. The pro forma figures are reported only in press releases. Lynn Turner, the outgoing SEC chief economist, calls the pro forma reports EBS earnings -- for "everything but bad stuff." The KEY is that SEC requires the GAAP presentation for the financials of public companies. Any pro-forma game playing for 'press release effect' as the article implies may fool only the most naive of investors, i.e., retail suckers. Institutional money will quickly arbitrage away any foolishness like that... isn't that what we see in after hours action after some earnings anncmnts.? Next day real time trading reverses small timers who bit on pro forma or BS CC talk. Hope that helps clarify my (limited) pro-SEC stance. Pea wants to BAN proforma presentations altogether, but that makes no sense since there is no need as long as GAAP is mandated. RO