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Technology Stocks : Intel Corporation (INTC)

INTC 39.37

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3:59 PM EST

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To: Dave who wrote (156697)	1/24/2002 10:46:56 AM
From: Joe NYC	Read Replies (1) of 186894

Dave, Regarding capex, Edelstons says, "Finally, Intel's capital spending budget of $5.5 billion is expected to decline 25% in 2002 (versus our estimate for a 20% decline), and this sharp decline suggests that Intel's depreciation expense (30% of COGS) will begin to decline as a percentage of sales during the next couple of years." I don't know about you, but it seems to be a very poor analysis. I am not sure how the depreciation schedules are set, but let's just simplify and say it is 5 years straight line. If capex last year were higher than previous 4 years, the current year is higher than that of 6 years ago, how can the depreciation decline? BTW, my observation of Mark Edelstone is that he is one of the weakest if not THE weakest analysts following this industry. <edit> Hmm... as percentage of sales. I didn't notice it originally. I guess that has an assumption about growth of sales outpacing growth of the depreciation. That's one of those ASSumptions </edit> Joe

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