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Technology Stocks : Intel Corporation (INTC)
INTC 33.83+0.6%11:50 AM EST
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To: Sudeep Bhoja who wrote (85589)7/14/1999 7:22:00 AM
From: Fred Fahmy  Read Replies (1) of 186894
 
Sudeep,

<As you all know revenues at $6.7B & EPS @0.51 is below estimates.>

Please explain how this affects Intel's long term prospects or long term earnings?? That is what will dictate INTC future price.

<1) They took over market share in the Celeron segment.>

Sounds positive to me and a much more important trend than missing earnings by 2 cents.

<2) Increased margins to 59% & guidance for the rest of the year
increased to 60% from 57%. Superb execution with falling ASP's.>

Again, sounds positive to me.

<3) Forecast strong second half but said Q3 will be only slightly
higher. I dont understand this given that Q3 is stronger than Q2.>

I think you are splitting hairs hear. A strong second half is what is more relevant. I found forward guidance to be positive.

<4) PIII tripled in volume in current Q and will exceed PII next Q.
I think they also mentioned that it will exceed Celeron. Thats really good news.>

Yes, very good.

<5) 4 way XEON systems will be out in Q3 after being delayed for 1.5 Quarters. Sloppy execution here.>

Could anyone have done it much better?? You make it sound like delivering such as system is a trivial task. A 1.5 quarter slip in the tech industry is not unusual. The important thing is that they will be out in Q3. Think of it as money held in reserve <gg>.

<6) Merced has taped out. Will introduce the 820 chipset in the 3Q
that supports RDRAM or SDRAM.>

Sounds positive to me.

<7) Level One will dilute future EPS by 3 cents. Dialogic by 1 cent.
Too bad Intel is forced to get into these lower margin businesses.>

Forced???? This has been their stated goal for many years. It's right in their annual reports. Intel's strategy is to grow total margin dollars at the expense of margin percentage. Margin dollars not margin percentage is what ultimately counts.

<In conclusion Intel's market is not what it used to be.>

I agree with you completely. Intel use to be a dying DRAM company, but through excellent leadership and vision has become one of the greatest technology companies in the world. They have positioned themselves right in the middle of a global technology revolution that is just beginning. Looking forward, few companies will benefit more from this revolution.

<However, the company's management is superb and is able to deliver in rather tough times.>

Very good and important point and in sharp contrast to some management teams (like....oh... let's say ...AMD for example) that haven't been able to deliver in the best of times.

FF
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