Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 242.41

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Nov 25 3:59 PM EST

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To: Proud_Infidel who wrote (2217)	8/9/2002 12:23:11 PM
From: Proud_Infidel	Read Replies (3) of 25522

I don't understand this from the briefing.com report on INTC '03 capex<bold>: 11:02AM Intel may reduce capex in 2003, re-evaluate manufacturing (INTC) 18.03 -0.35: Sources are telling us that Banc of America believes INTC's 2003 capex could be as low as $4.0 bln (co did not provide capex guidance for 2003 on their July 16 conference call); analyst believes reducing capex to that degree would surprise most analysts, who may be expecting flat-to-slightly up spending from 2002's $5.0-$5.3 bln. Further, firm believes that INTC is re-evaluating its manufacturing strategy and will increasingly emphasize outsourcing front-end services (ATMI and ASML may take over some lithography services), as current capex and depreciation levels are well above historical trends. Current estimates for INTC '02 revs are 26.9B. With 5.3B spent on capex, this is only 19.7%, well below historical highs and right in the middle of the historical range for capex spending. I am not sure what "historical trends" this analyst is looking at; I for one do not see their capex as being anywhere near out of line. Above historical trends would be capex in the mid 20's and above. Mid-teens to mid-20's has been the average LT range; given that we are smack in the middle of that range after a prolonged slump does not look to me to be at all exceeding historical trends. In fact $4B for '03 seems much too low if INTC even has flat revenues of 26.9B(4/26.9=14.8%) Any thought from others more enlightened? Brian

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