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

To: niceguy767 who wrote (77315)	4/16/2002 10:33:33 PM
From: brushwud	Read Replies (2) \| Respond to of 275872

Were INTC to eliminate goodwill from its balance sheet, S/E would be reduced by close to $5 billion from $35.8 billion to $31 billion...An S/E decline of this magnitude would have significant implications for INTC price given that many analysts watch S/E very closely... Well, it would reduce their book value from $5 and something to $4 and something, not much. That would actually improve their ROE, the most key measure of financial performance. I think most analysts consider Other Assets probably to be worth zero, since they're often just goodwill or loans to officers.

To: niceguy767 who wrote (77315)	4/16/2002 11:56:08 PM
From: ptanner	Read Replies (2) \| Respond to of 275872

niceguy, re: "Were INTC to eliminate goodwill from its balance sheet, S/E would be reduced" OK. This is a reason I hadn't considered but I don't think this is an asset that ought to be awarded any value in analyzing an investment. The disparity with AMD, however, is something which I have noted and do appreciate. AMD's balance sheet is much improved. However, AMD as an investment hasn't necessarily followed course. While AMD did make a bunch of money, the conversion of the convertible bonds to shares was a substantial portion of increasing S/E (same assets but less debt) but the affect on S/E per share was more muted (I couldn't find the particular qtrly balance sheet to do the math - I did look). S/E should be considered on a per share basis to include the affect of AMD's dilutive options and convertible bond redemption. To the extent that Intel's goodwill may be impaired... wouldn't this already be reflected in its share price? Would Intel be a different investment if they gave all the "goodwill" to charity? <pun intended> I appreciate your perspective on this but do not consider it a concern. Particularly not for AMD's future prospects. -PT

To: niceguy767 who wrote (77315)	4/17/2002 12:15:57 AM
From: ptanner	Read Replies (2) \| Respond to of 275872

NG, re: "INTC keeps posting a positive eps, yet S/E at best has declibned by almost $2 billion in the past year" From 1Q01 to 1Q02 shareholder equity declined by $1B (it was $1.5B for the prior qtr YOY). However, during these same periods the Goodwill amortized (not counting the separate entry for Amortization of acquisition-related intangibles and costs) was $1.27B ($1.71B). So the "equity" lost by the shareholders was Goodwill. EDIT: And if Intel's S/E was reduced by the "loss" of all its Goodwill it should no longer have a market cap of $200B? -PT