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Technology Stocks : INTC

INTC 38.16

+2.5%

Nov 7 9:30 AM EST

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To: Jules B. Garfunkel who wrote (693)	10/16/1997 1:47:00 PM
From: Harry Landsiedel	of 990

Jules. Re: Intel earnings. Thanx for your very well reasoned and insightful post. I too was a little surprised by the "miss" and (as John Fowler pointed out on the thread) the conservatism going forward. I believe that Intel recognizes that the main reason for this transitional quarter (Pentium II, inventory adjustments, R&D hiccup) is really the big drop in prices they took earlier than expected. While most think it was AMD and Cyrix per se, I think it was the risk of losing out on the low end that was developing in the market. Their goal has always been to take actions that will sell more computers, and the price action did that. It also put the screws to AMD big-time. If after they did that, they had a blowout quarter, than that would look more monopolistic. But if they "missed" estimates, it would look like AMD and Cyrix's presence were hurting profits. This would also fit with your scenario of becoming more conservative AFTER the FTC suit. Finally, being more conservative at this juncture will reward the long term shareholder more who will not panic and sell. It will hurt the short term trader who will not be smart enough to get back in until too late. Just look at some of the numbers for 1998. Paine Webber dropped EPS to $3.50 from $4.78 and predicted that Intel will trade in the low 70's. When I get the new numbers that Bear Stearns Andy Neff is suggesting, for 97 and 98 I will post them. My best guess now is $3.95 and $4.75 HL

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