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To: phbolton who wrote (39267)	9/28/1998 5:37:00 PM
From: Thomas G. Busillo	Respond to of 53903

ph, funny how they didn't mention the $49.1 million in tax-benefits in their write-up. A nice .23/share boost. Such are the benefits of being unprofitable <g> Good trading, Tom

To: phbolton who wrote (39267)	9/29/1998 9:12:00 AM
From: Thomas G. Busillo	Read Replies (3) \| Respond to of 53903

ph, I'm a cynic, not an accountant, however... Semiconductor memory operations had a negative gross margin of 10 percent in the fourth fiscal quarter compared to a negative 20 percent in the third fiscal quarter. If that's true, then when you attempt to break-out the memory ops COGS, the numbers should look like roughly: semicon revs. 372.50 semicon COGS 409.75 gross loss (37.25) approximate GM -10% And yet, didn't they take a roughly $30 mil. inventory write-down last Q? Where does that come into play? What would their gross margins look like IF they hadn't taken a $30 mil. write-down the prior quarter (I'm assuming they're using FIFO)? semicon revs. 372.50 semicon COGS 409.75 3Q write off 30.00 gross loss (67.25) approximate GM -18.05% I don't know if you can do that and frankly it doesn't really matter in terms of trading. The stock will trade as it always has traded - based on expectations of a recovery in the industry (a move towards supply-demand parity and stable prices) and MU's position as a tough low-cost player. But the cynic in me questions how a company can trumpet that type of improvement in gross margins in their earnings release PR without making any reference to an inventory write-down the prior quarter that assisted in the improvement. Good trading, Tom