Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 35.85

+0.3%

1:08 PM EST

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To: Mike Taylor who wrote (36838)	10/19/1997 4:00:00 PM
From: Fred Fahmy	of 186894

Mike, The key is gross profit DOLLARS not gross margin percentages. Big, big difference. Intel's strategy has never been to increase margin percentages but margin dollars. What good is it if your margins are increasing but you are losing money (especially if the only reason your margin percentages are improving is because they were so miserable to begin with)??? Intel has said for almost two years now that they do expect margins of their overall business to decline back to the traditioanl 50% level from the recent 60% level due to the addition of new lower margin businesses. Intel's strategy is to continue diversifying beyond CPU's. They know very well that this additional revenue will not likely come at the same high margins as their CPU business. Here's an example. Would you rather have a $50B revenue business at 60% marings or a $70B revenue business at 50% margins?? FF

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