Pessimism over Intel may be overdone -Barron's
NEW YORK, Jan 27 (Reuters) - Recent pessimism over Intel Corp.'s(NasdaqNM:INTC - news) prospects may be overdone, with the semiconductor giant poised to show improving profit margins and boost production with more efficient technology, according to an article in the weekly business magazine Barron's.
Although the full impact of those factors may not be felt until 2003, they should help leave Intel's shares plenty of room to retrace recent losses, the weekly magazine said.
The No. 1 computer chip maker's shares slumped more than 8 percent within a week after Jan. 15, when it issued a gloomy sales forecast for the first quarter of 2002. They have since retraced their losses somewhat, closing Friday at $33.68.
The Santa Clara, California-based company's switch from 200 millimeter wafer production to far more efficient 300 millimeter wafers -- a process that could last another two years or more -- will double production, Barron's said.
In addition, Intel's order book is strong -- though the company has conceded that orders could be canceled if demand for PCs drifts back down after the surprising fourth-quarter lift. Orders are likely to grow as the economy rebounds, and companies look to replace the personal computers they purchased ahead of Y2K, Barron's said. |
