Replies to post #37655 on Advanced Micro Devices Inc (AMD)

[Petz]

No comment on the SG&A increase, but you have to realize that even if AMD has 50% incremental margins, profits, will not go up by half of sales. Why? Because 40% of the flash profit goes to Fujitsu, not AMD.

In other words, suppose that in Q2, AMD's CPG division has flat sales, and the flash division has an increase of $50M. If flash division now makes $25M profit, AMD only gets to report $15M of that.

Petz

[sgolds]

Tiger64, when comparing expenses with a year earlier be sure to apply the difference for Spansion. Starting with Q3/03 (I recall) both expenses and revenue went up as AMD booked the entire Spansion P&L above the line. (An adjustment later in the quarterly reports then puts 40% to Fujitsu.)