John, Since the gross margin was around 60% last quarter, volume would have to increase
by 50% just to give equal profits.
My reasons why Intel will "do all right" in 3Q and not make me worry much about the stock:
1. I think that if you read back some posts, and URL's (I know there are many) you'll find that the expectations for product mix in this quarter are far better than for 2Q. This comes from MMX and P2 MMX fast ramp up. In 2Q, Intel had just barely introduced MMX, much less P2. They're roaring now. 2Q was mostly classic Pentiums.
2. You show far too little improvement, IMO, for manufacturing cost,
2Q to 3Q. First thing that comes to mind that says yields are up up and away is availability of 300 MHz P2, in PCs and WSs, now. Wasn't supposed to be until at least 4Q.
3. Volumes are really picking up now for the Christmas season. This almost is a multiplying factor with the much better product mix.
4. Hey, Intel always cuts prices. Part of the company strategy and reason they are almost untouchable. Given this, why would one wonder why they can't pull it off one more time? How many quarters have they disappointed in the last 5 years?
Not another counter to your post, but I leave it up to Intel to go through the types of numbers you did, like varcost and grmarg, Q to Q.
I'm betting my money on Intel to not disappoint.
Tony |
