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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: The Duke of URL© who wrote (171645)	10/16/2002 10:30:48 AM
From: GVTucker	Read Replies (2) \| Respond to of 186894

Duke, Dan3 was referring to the fact that Intel shows earnings on the new GAAP for this year but on the old GAAP for last year. The result is that you don't have an apples to apples comparison, because last year's numbers include amortization that isn't in this year's numbers. In 3Q 2001 Intel recorded amortization of goodwill of $447mm, or about 6.5¢ per share pre tax, or 4.8¢ after tax. That means that apples to apples, there was a decline in earnings for Intel, year over year, if you use last year's operating earnings figure of 10¢.

To: The Duke of URL© who wrote (171645)	10/16/2002 11:27:59 PM
From: Dan3	Read Replies (2) \| Respond to of 186894

Re: Please explain.... This is not a trick question. Go to this page and download the spreadsheet: intel.com; Now look at the Operating income (line 20) and compare this year to last year - it's $964 million this year and $389 million last year. Looks pretty good, doesn't it? So why'd the stock go down? Now look at lines 13 and 14, where they amortize goodwill and other intangibles (e.g. we overpaid, but didn't want to show it as a loss at the time). They've gone from $609 million last year to $102 million this year - a difference of $507 million. There was no (significant) change in the underlying value of the asset costs being accounted for. But the new GAAP rules will let them sit on balance sheet fudges for acquisition costs forever, and Intel took advantage of it to prop up reported earnings. If they want to, they can keep reporting earnings until the company's hollowed out and there's nothing left, just like NT and its famous $20 Billion loss in one quarter when they finally fessed up to their acquisition costs. That's how Intel managed to show 10 cents earnings this year vs. 2 cents last year. For TY vs. LY numbers they should have restated last year's numbers and footnoted it. You missed it, but the big boys didn't, and that's why Intel's stock did so badly after they reported. A year ago the economy wasn't much better than it is now, and AMD was tough competition. AMD bottomed out this past quarter (they've finally made the transition to .13, and are closing the speed gap with Intel at the same time their costs are dropping) so this quarter was as good as gets for Intel for quite a while (when does the .90 transition go high volume?). Look at what a horrible pair of quarters AMD has just had, with the unexpected delay of their .13 process. Intel should have had a better Q3 this year than last, but they didn't. They shot themselves in the foot while aiming at AMD's head.