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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: niceguy767 who wrote (59083)	10/18/2001 11:48:37 AM
From: Paul Engel	Read Replies (1) \| Respond to of 275872

Be sure to use AMD's TOTAL LOSS of $0.54/per share - and not he PHONY BALONEY PRO FORMA loss - that is, be consistent !!! "The total net loss under GAAP (generally accepted accounting principles) for the third quarter of 2001 was $186,929,000, which amounted to $0.54 per share on 345,044,000 shares outstanding. In the second quarter of 2001, AMD reported net income of $17,352,000, which amounted to $0.05 per diluted share. " Was this a great quarter - or what !!!

To: niceguy767 who wrote (59083)	10/18/2001 3:03:32 PM
From: John Goldthorp	Respond to of 275872

Niceguy.. Intel's amortization of goodwill has had a negative effect on book value and earnings The total of quarterly amortization expense from 1Q99 to present is $3,785MM. (This amounts to about 50 cents a share in book value.) Inclusion in earnings has acted to reduce shareholders' equity by the same amount. The combined effects on shareholders' equity of net income and employee stock issuance (positive, goodwill amortization included), and stock buybacks and dividends (negative) are about $10,100MM(+). This explains almost all of the increase in net worth over the last eleven quarters.. With goodwill amortization backed out, Intel's net worth would be $3,785MM higher, with an attendant increase in book value. I don't think goodwill inclusion is "smoke and mirrors"; it reflects, over a relevant period, the impact on earnings of paying more than accounting value for assets acquired . I do think Wall Street's exclusion of goodwill is "smoke and mirrors". Merrill Lynch et al book their investment banking fees as income in the quarter received, then their securities analysts refuse to consider them as expense when studying the investment banker's client. Hmmmm. Just another reflection of their religious devotion to quarterly numbers and trends, as opposed to the true state of the business. Bottom line is: Intel earned a penny and a half in Q3, not a dime, IMO..Does it matter? Maybe, maybe not. If Intel's acquisitions continue indefinitely, the inclusion of goodwill amortization is certainly material. If the acquisitions program stops or winds down significantly, it just isn't that big a deal. Looking at it another way, though, the cumulative amortization expense is bigger than AMD's net worth -- by over $150MM. Wow! Thanks for alerting the thread to this. I didn't realize Intel's acquisitions over the last couple of years were quite of this magnitude. JG