Hi Petz,
Thanks for a very nice job and for taking care of the AMD Q4 ESP Contest winners list.
Here is an article expressing some concerns on Intel's Q1'00 - from Forbes site -
forbes.com ______________________
January 26, 2000 One Week View Are clouds gathering over Intel? By Om Malik NEW YORK. 6:00 PM EST-When you?re the largest chipmaker in the world, what do you do when your biggest customer is in trouble? Cold logic points to troubling times.
On Jan. 26, Dell (nasdaq: DELL) announced that it will report lower-than-anticipated revenue and earnings for the fourth fiscal quarter ending Jan. 28 and blamed the shortfall on an inconsistent flow of key semiconductor components.
Adding to Dell?s troubles was a slower-than-expected rebound in sales to corporate and institutional customers. Dell will announces its full financial results on Feb. 10.
Dell and all its personal computer brethren were counting on a strong demand following the Y2K-related slowdown. Dell said it expects to report revenue of about $6.7 billion for the fourth quarter, which would be up 30% from the prior-year period. Earnings are expected to be about $430 million, or 16 cents per share, including a per-share gain of about 1 cent from the sale of investments. The consensus of analysts' earnings estimates for the quarter was 21 cents per share.
Worse for Intel, Dell isn't the only personal computer maker that has been making cautionary noises. On Jan. 25, Compaq Computer (nyse: CPQ) CEO Michael Capellas said in a conference call: "The first quarter will start out a little bit slow. We expect revenue to decline quarter-to-quarter due to seasonality and...be backloaded due to the release of Windows 2000."
Other PC-makers, like Gateway (nyse: GTW) and Hewlett Packard (nyse: HWP), are also suggesting sluggish sales in the first quarter. All in all, bad signs for Intel (nasdaq: INTC), a key chip supplier to the PC market.
The bad news doesn't stop there. Intel has been losing key accounts to rival Advanced Micro Devices (nyse: AMD), which has wiggled its way into computers made by Gateway, Fujitsu, Hewlett-Packard and Compaq Computer. Furthermore, companies like Toshiba and NEC have started using AMD chips in their notebooks.
AMD has been helped by the gains from these new accounts. The first proof of the chip maker?s turnaround came earlier this month when it reported sales of $968.7 million, up 23% from $788.8 million in the year-ago period. Intel?s rival posted net income of $65 million, or 43 cents a share. AMD was expected to make 1 cent a share, according to a consensus estimate by First Call.
"I cannot believe that Intel is not losing market share to AMD. Look at all these accounts AMD has gotten into," said Fred Hickey, editor of The High Tech Strategist, a newsletter. He pointed out there are subtle warnings that post-Y2K demand for computers is not there. "Most corporations ordered [PCs] in advance as preparation for Y2K," he said.
"I think all this is adding up to a dismal quarter for Intel," said Hickey. For the first quarter of 2000 ending March 31, Wall Street analysts are expecting earnings of 63 cents per share on sales of $7.9 billion.
Given the troubles its customers are having, Intel may be in for some rough times.
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Goutama |
