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

To: Dan3 who wrote (78607)	4/27/2002 11:04:53 PM
From: Stoctrash	Read Replies (1) \| Respond to of 275872

Someone please give Techsu-shit4brains some facts like this; the clown is just oblivious: =============== Alas, the company didn't offer the faithful much to chew on. Barrett said 2002 revenue would be higher than 2001's; he even declared himself to be the most optimistic he has been in his 30 years at Intel. But clearly, Barrett wasn't referring to the short run. Telecom demand, Intel executives observed, shows no signs of improving. And Intel isn't forecasting any increase in corporate IT spending. Perhaps unintentionally, Intel provided a sobering tidbit about the semiconductor equipment sector. Dan Niles, Lehman's chip analyst, noted that one slide presented by CFO Andy Bryant indicated that Intel's capital spending in 2003 as a percentage of costs of good sold would dip a bit from 2002. Most analysts, Niles says, have been forecasting Intel's total cost of goods sold in 2003 would rise about 10%, which suggests capital spending for next year would be up less than 10% from the $5.5 billion budgeted for 2003. (Intel so far hasn't otherwise commented on 2003 capital spending plans.) A rise of less than 10% would seem fairly disappointing giving the high hopes for a robust recovery: SEMI, the equipment industry trade group, has been forecasting a 29% sales increase for next year. Given the healthy performance of the equipment stocks this year, any moderation of expectations of the coming recovery wouldn't be good news for the sector. Niles, who has been advising Intel investors to "sell on strength," also sees danger ahead for many mainstream chip stocks. In recent months, he maintains, chip makers have benefited from overly zealous inventory cutting done by personal computer makers in late 2001. The result has been a need for the box makers to replenish inventory. But Niles contends that inventories are nearly back to normal, which suggests that sales growth in the second half of the year will require improving demand from tech and telecom end markets. Expectations are high that Intel and other chip makers will show a smart recovery in the year's last six months. But, so far, no signs of an impending pickup have materialized. And, Niles notes, valuations are rich. Optional Accounting Merrill Lynch chip analyst Joe Osha has some sobering observations about the impact of stock options on the semiconductor sector. In a report last week, Osha noted that expensing stock options would have reduced GAAP net income for the chip companies he follows by 43% in 1999, 31% in 2000 and 69% in 2001. (GAAP stands for generally accepted accounting principles.) He also figures that tax benefits from options exercise accounted for 13% of cash flow from operations in 1999, 26% in 2000 and 25% in 2001. That's an important observation, and more than just a question of how to present the data. As Osha notes, Michigan Sen. Carl Levin has proposed legislation that would bar companies from taking a tax benefit from options exercise unless they're also expensed on GAAP earnings statements. "The result," he writes, "would either be a substantial reduction in GAAP earnings -- or a reduction in cash flow as the tax benefit associated with options exercise goes away." One final thing: as Osha notes, options grants in the semiconductor industry actually increased in 2001, despite the ugly technology downturn and widespread layoffs. ==========

To: Dan3 who wrote (78607)	4/28/2002 12:17:36 AM
From: Monica Detwiler	Respond to of 275872

What if transmeta says they have 100% of the X86 market "that matters!" That would be foolish - since Transmeta does nothing but lose money quarter after quarter. However, losing money quarter after quarter makes Transmeta very similar to AMD - doesn't it, Dan3? Let's both LOL !!