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Politics : Formerly About Advanced Micro Devices
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To: Petz who wrote (64988)7/12/1999 8:22:00 PM
From: Charles R  Read Replies (1) of 1578904
 
Petz,

<Ashok Kumar expects Intel's ASP's dropped 10% in one quarter - his expectations for revenues of about $6.6 billion is due to a drop of 10 percent in average selling prices from the first quarter....>

Thanks for the link. If the ASP erosion is right, Intel ASPs would have slipped under $200. Pretty interesting.

Let's assume the guy is right and see the math - slightly lower units (say 2%) at a 10% lower ASPs. That is an approximately $700M shortfall in revenues. Flash is up say $50M. Networking, lets's say another $50M. Channel stuffing, another $100M. Viola! That brings it to $6.6B number that Ashok states.

On the profit side, the picture is somewhat different. The $700M
revenue drop is purely coming out of gross margins. Let's say Intel squeezed out 5 points (very generous) since last quarter in cost reductions. This gives you $350M (approx on $7B). Let's say another $50M comes from Flash (additional revenues on flash are pretty much pure margins). Let's throw in another $50M from Networking and channel stuffing. Let's throw in another $100M investment income (all those internet ventures and puts got to give something)
So, there is still another $150M shortfall. That is about 4 cents short from last Q. That makes the 53 cents that Ashok forecasts.

Tomorrow should be interesting.

Chuck
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