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Technology Stocks : Intel Corporation (INTC)
INTC 36.15-0.6%Dec 24 12:59 PM EST
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To: Amy J who wrote (136999)6/8/2001 9:04:21 AM
From: Dan3  Read Replies (2) of 186894
 
Re: after a contraction and during a recovery to R, the expenses tend to be (X - cuts)

I agree with pretty much your entire analysis. But I disagree on your unstated assumption which is that Intel is cutting costs during this slowdown.

They are in a capital intensive business and have been substantially increasing their costs over this period. Which I think will greatly reduce the profitability gains they could see in an upturn 2 years from now.

It's AMD that has been holding constant or cutting costs during the slowdown.

Check out change in the ratio of sales to undepreciated costs through the period - those undepreciated costs will have to be recovered during the next upturn before substantial profit gains can be made.

Regards,

Dan
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