New System, Old Problem

These are AMD’s and Intel’s earnings and SEC reports.

AMD could have a bad time of it for one good and one bad reason. The good reason may be falling flash memory prices. The bad reason is taxes. AMD has chewed up all its tax benefits from previous year’s losses, and now will be paying 30% or so of its profits in taxes. So after-tax profits will be down simply because they’re paying more taxes. This is not news, and no surprise to anyone who allegedly follows the stock. Nonetheless, this little fact of life is sometimes a mystery to the stock market and analysts, sometimes they pay attention, sometimes they don’t. So if you see “AMD profits down 40%” that was written by a dimwit who thought one number told him or her everything.

Intel has already said, “We’re going to have a terrible quarter,” and tossed out some pretty bad numbers. When a company has to do that, they usually try to project the whole quarter to be a bit on the gloomy side, so they can meet or beat the projection. So if Intel does a little better than their projection, that’s not good news. If Intel does significantly worse than their gloomy projection, that really is bad news.

Potentially even more important than the numbers, though, are the company’s comments about itself to the SEC. They don’t have their marketing people write these things, because if they BS the SEC big-time, a few of the execs might end up serving a little hard time. You can pick up some valuable tidbits reading these.

What does that have to do with you, Mr. CPU Buyer? If Intel decides a little summer price war is in order, there might be some good clues of that in the Intel report.

The SEC puts these up on their free website a few days after they’re issued by the company. I’ll put up links and comments once they become available.

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