North Andover, MA
reply to mlundin
Re: Comcast/AT&T Of course you're basing this off of bottomline accounting, which is horribly smooted, and certainly obsfucated.
I mean they have $36B of depr fixed assets, but only 163m undepr'd? Wtf is that? They have a $1b non-op Loss, and their SGA exceeds their COGS by $3B! Just assuming those are accounting mechanisms their margin is suddenly 30%. Should it cost $1 of overhead to sell $1 of goods, ESPECIALLY when you're in a duopoly?
Lets take a look at what it costs walmart to sell ACTUAL PHYSICAL GOODS. For every $1 of "everyday low price" goods they sell, it cost them .24. Lets extrapolate that to Comcast. Their SGA by this method should be ~$2. So that adds $9B to their bottom line. Now add back the non-operaing loss, and you have $12.5 billion of profit for 2006. Which is a 50% margin. Now what is their REAL COGS. I mean, they have very little physical product. It's all 1's and 0's. I don't know how they determine that, but it sounds awfully like a software company to me.
Lets take a look at Microsoft. Now their SGA expense would support Comcasts, BUT they actually create things, which they have to pay millionaire engineers to create. Maybe it's a justification for Comcast, I dunno. The point being, that THEIR 1's and 0's cost them .25 cents per $1 of sales. Comcast's 1's and 0's cost them .38 cents per $1. So again, is it overstated.. I don't know, but scaling it back to .25 cents add's ANOTHER $3B o the bottom line. Now you have $15.5B in Net Profit, which is a 62% margin. The point being that Exxon also reports a 10% unadjusted profit margin; you know that's bullshit, and you should know this is too.