The problem with Jan '07 is that so far there is no quarterly or year-end report for ATI (since Aug 31), and maybe there will not be one, now that they don't exist as a company anymore.
My understanding is that ATI barely earns any profit. I think they've made about $200m net in the past 5 years.
The interest on debt to buy them will be at least $175m/yr, and foregone interest will be at least $50m. Plus AMD stock will be diluted by 10%.
To make up on the interest and dilution, ATI products need to earn $275m/yr. They have never done that even once in their history - in a sustainable way. They've had a good quarter occasionally, but I don't recall them ever having a whole good year.
So I expect AMD to earn less per share with ATI than without. The problem for January is that analysts might give AMD a free pass for one quarter, until negative results are clear.
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