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

To: ptanner who wrote (82660)	6/16/2002 10:32:10 PM
From: Dan3	Respond to of 275872

Re: Yes, Intel has made a massive investment in PPE and respect that it could have concerns And I see your perspective, which is the more generally held, traditional one. Well, we'll see how things turn out. As it stands, Intel will only have to absorb an extra $300 million in depreciation costs each quarter, on lower revenue, compared to the 2000-2001 period. This because of the costs they incurred, but deferred as capex. Although that is 5 cents per share of earnings margin they'll have to deal with. If the computer market suddenly picks up, it'll be a,"who cares?" If it's truly a one time event, (as they are treating it in their accounts) it's not all that important. The other possibility is that AMD will continue to provide real competition, and Intel will continue to have to spend on capex as heavily as they have been for the past two years, to hold off AMD. In that case, pressure on their earnings will steadily increase as quarterly depreciation expense asymptotically approaches quarterly capex. If AMD's competition causes a permanent (foreseeable future) increase in annual capex to $6 Billion from $4 Billion, that's an annual profit decrease of about 33 cents per share, 8 or 9 cents per quarter. What did they make last quarter?

To: ptanner who wrote (82660)	6/16/2002 10:44:51 PM
From: Dan3	Respond to of 275872

Re: I did omit AMD's capital leases but don't see them as being very significant You're right. I've been looking at the $68 million per quarter they spend on capital leases and debt, and not knowing how much to assign to the debt. Thanks for the correction. Dan