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

To: Dan3 who wrote (77338)	4/17/2002 1:43:41 AM
From: ptanner	Respond to of 275872

Dan, re: "Intel spends money on its FABs every quarter, AMD doesn't buy Alchemy every quarter." While Alchemy was a surprise... AMD also spends money on its FABs every quarter. Both firms account for their capital invesments in the same fashion. It is a coincidence that AMD's new capital spending and depreciation are roughly comparable. Intel's expansion in its physical plant will show up on the income statements. re: "And they shouldn't wait a couple of quarters, then remove the Asset but not include as a charge against earnings because it's a "sunk" cost." I don't believe you can remove or add an Asset without a charge on the income statement. You can convert an asset from cash to capital plant or Goodwill; when assets are depreciated this reduction is noted on the income sheet. If an asset is sold any net gain is noted as income - like when AMD sold off a couple of divisions for more than they were valued on the books (ie. $100M on balance sheet / sold for $200M / note $100M in income and add $200M in cash to assets; ignoring taxes). re: "Look at the bottom line for Intel: they've been reporting Billion dollar profits while their assets keep shrinking each quarter." Intel has highlighted their pro-forma earnings as they considered the acquisition related costs to be irrelevant to considering operating performance. I feel that Intel's pro-forma presentation is a more accurate presentation of current operations and see that this complicates the bottom line on the asset sheet. FASB 142 seems to be a far more appropriate tool but I think simply considering Goodwill as worthless provides a simple solution. re: "Every quarter they have one time costs that they exclude from the earnings considerations." I agree that the one-time charges have been abused by some companies. However, I would not Intel in this category. I guess I just see a lot more abusive accounting by other companies (ie. AOL "capitalizing" its cost of acquiring customers even though a customer is an asset of uncertain duration rather than expensing to improve current bottom line). I accept that there are discrepancies between what Intel chooses to highlight and what is reflected on the balance sheet. However, the balance sheet is a long ways from how the company is valued by the market. We should just agree to disagree on this one. Let's just trust the accountants <g> oops, no the analysts <g> oops, ok we should just trust the government <vbg>. -PT