Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: aleph0 who wrote (200477)	6/5/2006 12:36:48 PM
From: AK2004	Respond to of 275872

aleph0 Good catch, I have not noticed that. Someone should inform Elmer about it as well :-)) -AK

To: aleph0 who wrote (200477)	6/5/2006 2:58:03 PM
From: brushwud	Read Replies (2) \| Respond to of 275872

the whole ( and only ) point of Intel's NOR operation was to cause pricing pressure against AMD in this segment - and not to make money Right, their charter is to lose $150 million/year strategically as they've done for the previous three years and they're ahead of schedule this year. Delivering on this is how Sean Maloney got be an executive VP. As long as AMD still has to put 38% or whatever of Spansion's loss on their income statement, Intel has no incentive to jettison NOR, because their flash losses are a smaller percentage of sales than AMD's. Intel can't sell the NOR division because no one else wants to manufacture Stratacrap, so they'll just roll the manufacturing assets into chipsets whenever AMD sells its remaining shares in Spansion. Intel guided to $8 billion revenue and less than 50% gross margin. So the drop in GM relative to last Q when it was 55% should reduce their earnings by at least $400 million, to less than $1 billion this Q. But 16,000 layoffs will also cost around $500 million and facilities closings and other would increase this loss. Amazingly, this is still not enough to push them into the red for one Q. But the goodwill impairment charges implied by selling, or even planning to sell, those other divisions will. These losses are material and not comprehended by their guidance, although the market might be anticipating them at this point. If they already know these results of their "business review" they should make them public immediately. I was expecting a mid-Q downdate on Friday, before the commencement of their previously stated quiet period. The longer this drags out, the better for AMD.