Paul,
I call your attention to my, exchange2000.com
"---Intel's raw materials inventory and finished goods inventory were actually down sequentially in Q3, despite revenues increasing sequentially. The only reasons that I can come up with for this phenomenon was that Intel made an inventory adjustment in the quarter. This I believe was done so as to accelerate moving out older classic Pentium's, and to adjust to their OEM's new "build to order" manufacturing model, (i.e. CPQ following a Dell method of manufacturing). Further evidence of this can be found in the decrease of Intel's average-days-sales-outstanding, by 4 days, to 43 days from the previous quarter. Therefore, both of these reasons would seem to suggest that the inventory adjustment was an aberration and a one time event that should not carry forward into future quarters.
In my estimation the 9 % reduction in average-days-sales outstanding probably accounted for another 5 cents in Intel's earnings shortfall for the third quarter.
Intel's raw materials inventory and finished goods inventory were actually down sequentially in Q3, despite revenues increasing sequentially. The only reasons that I can come up with for this phenomenon was that Intel made an inventory adjustment in the quarter. This I believe was done so as to accelerate moving out older classic Pentium's, and to adjust to their OEM's new "build to order" manufacturing model, (i.e. CPQ following a Dell method of manufacturing). Further evidence of this can be found in the decrease of Intel's average-days-sales-outstanding, by 4 days, to 43 days from the previous quarter. Therefore, both of these reasons would seem to suggest that the inventory adjustment was an aberration and a one time event that should not carry forward into future quarters."
In my estimation the 9 % reduction in average-days-sales outstanding probably accounted for another 5 cents in Intel's earnings shortfall for the third quarter. on the INTC thread. In that post which was written right after Intel released Q3 earnings, I discused the JIT adjustment, in addition, to other observations."
I have often discused on SI, my opinion that the job of the long term investor is to identify aberations in the "market". By that I mean that investors should look for when the market misinterprets a past, or future event. I believe this was this same thing that Ibexx was saying yesterday in her post #39506 , recommending investors focus on the long term fundamentals and not short term market fluctuations, or manipulations. Therefore, as I have posted over the last week, I have been buying INTC Calls, trying to take advantage of the fact that I believed that analysts had misinterpretated Intel's inventory situation. This misinterpretation has now, hopefully, been clarified by Intel. Going forward analysts should recognize that JIT manufacturing was a short term phenomenon. An event which over time will have a positive impact on Intel, and was in no way an indication of weakening demand, (as had been almost univerally interpreted by other analysts)
Regards,
Jules |
