07:10 ET Intel (INTC) 34.68: CSFB upgrades to BUY from Hold, based on capex and headcount cuts that better position INTC for upgrade cycle and efficiencies from 300mm in 2003. Owing to projected higher gross margins, firm raises Q1 est by a penny to $0.15 on rev of $6.8 bln, raises 2002 by 7 cents to $0.70 on rev of $29 bln, and raises 2003 by 11 cents to $0.99 on rev of $33.1 bln.
Intel (INTC) 34.68 -0.16: Intel is trading down to 33.75 despite its report after the bell that was pretty much as expected. Most analysts were expecting the company to surpass estimates and it did -- with more upside than many expected. Revenue came in at $7.0 bln vs the consensus estimate of $6.85 bln. The company provided guidance for Q1 sales of $6.4-$7 bln (consensus $6.63 bln). Intel has been giving itself a wide goal post over the last few quarters, so it's tough to get too excited about this outlook. Perhaps more important was the company's 2002 gross margin guidance of 51%, plus or minus a few points, versus 49% in 2001 due to higher volume levels and a richer product mix. Helping on the margins will be Intel's industry-leading 0.13-micron process technology and production on 300mm wafers. Probably the most watched number in this report was Intel's capital budget forecast. The bad news was dealt to the semi equipment makers as the company lowered its forecast for capital spending in 2002 to $5.5 bln vs $7.3 bln in 2001. This comes in at the lower end of analyst expectations at $5.5-$6.0 bln. The semi equipment stocks are lower on this report vs 4pm close: AMAT -2.91, NVLS -2.41, KLAC -3.31...Few can argue against Intel's future prospects, however, one has to continue to question Intel's valuation. The company is expected to earn $0.63 this year for a p/e of 55x. It appears a near term recovery has already been priced into the stock. -- Robert J. Reid, Briefing.com |
