Pravin
here is ssb on cost reduction - we are for a tough ride here
Regards
-Albert
02:23pm EST 20-Feb-01 Salomon Smith Barney (Jonathan Joseph 415-951-1887) INTC
INTC: Announced Expense Reduction In Response To Market Conditions
SALOMON SMITH BARNEY
Intel Corporation (INTC)
INTC: Announced Expense Reduction In Response To 2M (Outperform, Medium Risk)
Market Conditions Mkt Cap: $238,528.4 mil.
February 20, 2001 SUMMARY
* Intel (INTC-$34, 2M) has just announced internally
SEMICONDUCTORS it would take new belt tightening measures to help
Jonathan Joseph reduce expenses in the increasingly tough
415-951-1887 environment. Though the measures do not include
jonathan.joseph@ssmb.com layoffs, they do represent the toughest cost cutting
Dunham Winoto measures in several years and to us, demonstrate
415-951-1875 that business at the margin is weakening for the
company.
* The measures include deferral of pay increases for
top-level management, and a pushout for at least six
months of half the pay increase promised lower level
workers. In addition, salaried workers will no
longer participate in the "free PC" program begun
last year, while hourly wage workers (non-exempt)
will still be allowed to participate.
* We checked with management, and there is no change
to guidance that revenues will decline 10-15% this
quarter. They do reiterate, however, that the
quarter will be "made or broken" by the last 5-6
weeks of the quarter.
FUNDAMENTALS
P/E (12/01E) 36.2x
P/E (12/02E) 27.5x
TEV/EBITDA (12/01E) NA
TEV/EBITDA (12/02E) NA
Book Value/Share (12/01E) NA
Price/Book Value NA
Dividend/Yield (12/01E) $0.06/0.2%
Revenue (12/01E) $36,857.5 mil.
Proj. Long-Term EPS Growth 25%
ROE (12/01E) NA
Long-Term Debt to Capital(a) NA
INTC is in the S&P 500(R) Index.
(a) Data as of most recent quarter
SHARE DATA . RECOMMENDATION
Price (2/16/01) $34.38 Current Rating 2M
52-Week Range $74.88-$30.06 Prior Rating 2M
Shares Outstanding(a) 6,938.0 mil. Current Target Price $45.00
Convertible No Previous Target Price $45.00
EARNINGS PER SHARE
FY ends 1Q 2Q 3Q 4Q Full Year
12/00A Actual $0.36A $0.50A $0.41A $0.38A $1.66A
12/01E Current $0.22E $0.23E $0.24E $0.26E $0.95E
Previous $0.22E $0.23E $0.24E $0.26E $0.95E
12/02E Current $0.25E $0.28E $0.33E $0.39E $1.25E
Previous $0.25E $0.28E $0.33E $0.39E $1.25E
12/03E Current NA NA NA NA NA
Previous NA NA NA NA NA
First Call Consensus EPS: 12/01E $1.04; 12/02E $1.97; 12/03E NA |
