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

To: Dave Budde who wrote (74662)	3/15/2002 2:15:31 PM
From: tcmay	Read Replies (3) \| Respond to of 275872

"Why aren't they profitable?" "This is easy. Sustained profitability is a habit. Intel formed this habit over 30 years ago. "AMD has never formed this habit. I don't know how AMD could possibly form this habit given their history. "You can analyze numbers all you want, but if the management doesn't have the habit they will not sustain profitability." Quite so. There's something very odd about a company not being consistently profitable for more than a few quarters at a time. (And I don't buy the point Tony made that the consensus is that flash is what nuked them this last time around. If they really are much more efficient than Intel is at producing processors--which I doubt for a few good reasons--and they make 22% of Windows processors, they claim, then it's time they should be turning a real profit. Fact is, Intel produces enough gross profit per quarter, even now, to pay for a brand-new $2 billion fab each and every quarter. (I assume the AMD fans will say something about how AMD's yields are so high that they can make everything they need at Fab 30...in the 40% of it they've reportedly filled. Bizarre.) I haven't crunched all the detailed financial numbers for either AMD or Intel. That would take days and require full reports, in gory detail. (And I haven't seen many people here try to crunch these numbers in depth...I see mainly snippets and facets. Maybe one of you can point me/us to a detailed calculation showing how AMD is actually as profitable as it should be, if all the claims about yields and cost of manufacturing are true. I would hope some analysts, who get paid to subscribe to all the EDGAR reports, attend all of the briefings, and who should be spending several hours a day analyzing numbers in great detail would be able to make sense out of this conundrum: If AMD is such a leader, and such a low-cost producer, with such high yields, WHY NO SIGNIFICANT PROFITS? I can look at the basic financials and see that this is just not a company which has ever be run as a money-making operation for shareholders.) AMD is still losing money after all of these years. If they can't make a consistent profit during years of substantial PC growth ('98-01) and with a good design (Athlon), then when WILL they be profitable? The stock price is roughly where it was 20 years ago. Whew. Must be because of those accounting tricks that are giving Intel gross profits of $2 B a quarter (even $5 B a year ago) while "tricking" AMD into losing money consistently for many years. --Tim May