Here is some historic perspective on INTC.
1. In March 1998, INTC warned and blamed on Europe, Asia etc.
Here is the link
Message 3607345
U.S stocks in London fall on Intel warning
LONDON, March 5 (Reuters) - U.S. stocks in London fell
across the board on Thursday following an earnings warning on
Wednesday from semi-conductor giant Intel Corp INTC.O.
Intel shares dropped $10-5/16 to $75-1/8 by 1055 GMT, Compaq
Computer Corp CPQ.N slid $1-1/2 to $28.
"All stocks are indicated down on the back of the Intel
statement," said one dealer.
Intel Corp said its first quarter net income and revenues
will be below expectations due to weaker-than-anticipated demand
from personal computer makers.
The company said it now expected its first quarter revenues
to be about 10 percent below fourth quarter revenues of $6.5
billion and gross profit margins in the range of 53 percent of
revenues.
Dealers said the warning, which came after the market closed
in New York on Wednesday, could spark some selling of technology
stocks when trading begins on Wall Street on Thursday.
They said the broader market was also likely to suffer and
the Dow was seen tumbling around 90 to 100 points at its open.
The March S&P future was trading at 1,037.7, some 11 points
below its estimated fair value.
The Intel news sparked a rout in stock markets across Asia
and Europe. Hong Kong dropped nearly five percent, Tokyo fell
1.45 percent, Frankfurt shed 1.6 percent and London slid 1.7
percent.
However, some dealers believed the negative impact of the
Intel news could be short lived. They argued the market could
pare losses if technology analysts in New York made conciliatory
remarks on Intel stock and the technology sector.
"It could be an over reaction because while the news is not
good, it was not wholly unexpected," said one dealer.
"The direction of the market will depend a lot on how
analysts view Intel. If a lot the respected research analysts
stay with the stock, the market could stabilise."
But some dealers said the Intel warning would heighten
investor nervousness, particularly ahead of the much-awaited
non-farm payroll figures due on Friday.
They said there were concerns that while the market
continued to trade near its all-time high, there was a recent
trend among analysts to revise earnings forecasts downwards.
"The market is at very lofty levels and if there is a
concern about earnings, we may have to give some of these gains
back," said a dealer.
"Investors have been looking for an excuse to take profits
and we have certainly got one today."
U.S. economic data due on Thursday included weekly jobless
claims. The consensus estimate for the week to February 28 was
316,000, while factory orders in January were expected to show a
rise of 0.4 percent.
REUTERS
Rtr 07:02 03-05-98
2. Briefing's brief:
Message 14429904
INTC warned after market closed on March 4, 1998.
Belowe is Briefing.com's note on the warning:
The latest from Briefing.com
Intel (INTC) Update: Intel did not specifically note its earnings expectations for Q1, but based on the $650 mln
revenue shortfall and its gross margins, we can expect analysts' estimates to come down about $0.20 from the current
First Call consensus of $0.93. Other bad news: this Q1 shortfall was not just an Asia story; Intel cited weakness in
Europe and the Americas as well. And still more bad news, margins fell to 53% in Q1. In January, Intel said that
margins were "expected to be down a few points from 59 percent" in Q4 -- the decline to 53% sounds like more than
a "few points." While many will be quick to note that Q1 is typically weak for Intel, it is not this weak. In the last three
years, revenues have always risen sequentially from Q4 to Q1; this year they will fall 10%. Even year/year trends look
ugly -- revenues will be down over 9% year/year in Q1; from 1995-97, year/year revenue growth averaged 30%.
One positive (or not so negative) note: Intel said that expenses will be about 5% higher than their January estimate, but
this increase is due entirely to a nonrecurring charge related to the Chips & Technologies acquisition.
After Hours Trading Update: Intel has now dropped to 74 on Instinet. Other tech stocks are following suit; here's a list
of current quotes with the NY close in parentheses: DELL 133 (138 7/8), IBM 99 (102 1/16), CPQ 28 (29 1/2),
TXN 52 1/2 (55), MU 33 3/4 (35 5/8), MSFT 79 1/2 (82 5/16).
3. It is more of INTC's problem as it is losing market share to AMD and is doing a catch up role now than a leader role.
Then there is this Transmeta.
Message 14431089
4. It is now waking up to new PDA and net appliance market.
May not have as strong a hold on this new emerging segment as it has on PC segment.
So it may not be as bad as it looks for teh entire market. But reality usually catchs up late with the Street, as they are in shoot first and think later mentality.
Good night.
-Nat |
