Oh, come on, corporations (and their managements) have been playing dirty games with earnings since I started observing the market. They have a bad year the stock is already down, so they write off everything including the kitchen sink (remember CSCO big write off of inventories) just to bleed these back in the form of lowered COGS in the next few quarters (and beat the numbers by a penny, of course...). Actually, the GAAP earning that are being reported now are inflated relative to the 1982 GAAP earnings. In 1982, companies had to amortize goodwill (resulting from acquisitions etc.), over some 20 years or so, current GAAP accounting no longer take amortization for goodwill, it is written off only "when corporations determine that they no longer cary the value stated on the books". Guess what, you get a new guy running the show, the first thing he does is write off all the goodwill, you get a bad quarter or year and the stock is already in the basement, good time to write off that goodwill. There will be more accounting manipulations now than ever before...
Zeev
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