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Technology Stocks : Intel Corporation (INTC)

INTC 43.95

+3.4%

Jan 27 3:59 PM EST

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To: Paul Engel who wrote (2091)	7/10/1996 1:51:00 AM
From: Joel R. Phillips	of 186894

No question Intel will do much better than MOT. Why? Profit margins. Look at MOT's previous quarterly earnings estimates and actual numbers, they are almost negatively correlated and all over the map. What do you expect from a company with single-digit net profit margins? Quarter Jun-95 to quarter Jun-96 MOT had something like, increase of 1.5% [as percentage of revenue] in various costs, 1.5% increase in depreciation, flat revenues, which gives a 2% drop in net margins [after tax, 7%->5%] or a 30% drop in EPS. With its fat margins things would have to be "three times as bad" at Intel for an equivalent EPS hit. Any stir over MOT "missing estimates" will be all sound and fury, signifying nothing, IMO. --joel

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