Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 36.34

-0.1%

3:59 PM EST

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To: William Hunt who wrote (38319)	10/29/1997 5:55:00 PM
From: kolo55	Read Replies (2) of 186894

You asked whether Intel's earnings will increase next year? This is a good question, even though the people who replied to you scoffed at it. Will Intel earnings increase next year? I don't think so; at least not over the last quarter run rate (annualized). The company said they expect gross margin to drop to 50%, from the 60% or so this year. This would wipe out a 20% growth in revenues. But since units are expected to rise only 20% or so, revenues should grow less due to pricing pressures. Bottom line, Intel profits next year should drop from the current run rate. Also Intel has to buy shares for incentive programs (see WSJ article several months ago). This cost doesn't show up as an expense. The earnings you see are "optimistically reported". I sold all my remaining Intel warrants when the stock was in the mid-90s. A year from now you'll still be able to buy this stock at 80. I have owned the stock since the winter of 95/96, when it traded at a significant discount to the S&P500 and they had a very conservative forward earnings estimate (which they clobbered). Now I see the earnings estimates for next year are dropping. Good luck, Paul

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