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

To: andreas_wonisch who wrote (59246)10/19/2001 9:59:26 AM
From: Bill JacksonRead Replies (1) | Respond to of 275872
 
Andreas, The cost to make one more CPU is less than $60, so they are cash flow positive, even as the company loses money on total sales due to assorted fixed costs not being spread over enough CPUs. That means sell as many as you can, if the volume goes up and the fixed cost per unit plus the variable cost falls below $60 you have a net profit on each one.

Bill



To: andreas_wonisch who wrote (59246)10/19/2001 11:08:32 AM
From: AK2004Read Replies (1) | Respond to of 275872
 
Andreas
he specifically said "cash flow" and not earnings. Larger portion of the cost of the chip is the original upfront investment depreciation (experts, please, do correct me if I am way off). While amd did loose a lot of money on chip business that did not hurt their cash position but had rather opposite effect. Many worry that negative earnings decrease cash position of the company but that is not exactly accurate.
Regards
-Albert


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