Re: I still think it will trade in the low to mid 30's after the call but it could easily test 30 again with the weight of the ANALysts comments on Wednesday
I pretty much agree with your guess, except I think it could tank fairly hard after the analysts comment. But that's based upon my expectation for the report, compare this with what you expect:
I think Q4 2000 numbers will be "OK" - no happy surprise, but not terrible. I base this on reports that everything was going along fairly well until late November / early December, at which point the bottom fell out of the market. By that time, the OEMs and distributors had already stocked up, and a most of Intel's quarter was already in the bag. My understanding is that Intel doesn't provide the degree of price protection that AMD does, so once those OEMs and distributors bought from Intel, they were left holding those goods at those prices. There were likely many fabulous deals available from Intel to OEMs and distributors by early December, but at that point nobody wanted any more stock. I'm sure Intel made some accommodations, but they still locked in a bunch of high margin sales. AMD, on the other hand, cut prices as soon as demand slowed, and rebated the difference on inventory held by distributors and OEMs - I think that's why you saw that sudden, huge drop in AMD prices, but much less of a change in Intel prices.
So Intel's Q4 won't be so bad. Now the bad part, there is still a lot of high cost Intel inventory in the channel, and there will be a lot of nervousness about accepting much new stock from Intel for a while (burned fingers, and all that). So Intel sales for Q1 are going to start off very, very, slowly.
So Intel's number for Q4 is going to be OK, but guidance for Q1 is going to be pretty cautious. I expect an initial lift from the Q4 number, then a fall after the guidance is digested.
There will be a lot of brave and optimistic talk about up to 20 million P4 sales this year, but then the analysts will realize that that's not many for a company that expects to sell over 100 million CPUs this year. Then they'll further realize that close to half that 20 million aren't expected until Q4, 2000 - and Q4 is quite a ways away right now, and sometimes things don't go as planned. The next 3 quarters being P3 and Celeron vs. Athlon and Duron aren't going to look so great.
Then there will be some brave talk about 1.26GHZ .13 Tualatin P3s coming next quarter, but then some analyst will notice that AMD is already selling 1.2GHZ Athlons - and they are less than $300, quantity 1, at a store near you.
So I think there will be a blip up, and then a slide down.
If the numbers are a lot better than consensus, and/or guidance highly upbeat, the stock shouldn't go down. If there is a major NASDAQ rally, the market updraft would take Intel along with it. But I don't expect either. And if the analysts figure it all out, and get their conclusions publicized between earnings release and the following morning's open, then there won't even be a brief blip up.
Regards, and good luck, and believe me you aren't alone,
Dan
PS - I'd also be interested in comments. |
