Replies to post #32258 on Advanced Micro Devices Inc (AMD)

[ChrisC_R]

Hail, - Re your:

"CPU Profit $67M (to) $47M - down $20M using GM of %60"

If the Margin were 60%, the profit would be down $30M on a revenue reduction of $50M.

Movement of revenue from a high GM group to a lower GM group will obviously lead to less profits.

[dougSF30]

HailMary, your example is flawed, because you overestimated the shift in revenues from CPU to Flash by a factor of 5!!

Because the announced shift is actually:

CPG -2%
Flash +2%

(And not +/- 10%)

This amounts to noise compared to any overall margin increase, which was the basis of his prediction.

Doug

[Petz]

When projecting future Flash Profits, keep in mind that AMD only gets about 60% of the profit and Fujitsu gets 40%. So even if incremental gross margin were 100%, reported profits would only grow 60M on a revenue increase of 100M.

Petz