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Technology Stocks : Intel Corporation (INTC)
INTC 45.51+10.7%Jan 9 9:30 AM EST
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To: Petz who wrote (41744)12/8/1997 3:58:00 PM
From: L. Adam Latham   of 186894
 
John:

Re: ...Intel's margins in CPU's will fall to the 50% area even as its competitor's (AMD, NSM, IDT) margins rise from negative to the 30% area.

Remember that gross margins (Sales - COGS) are talked about here, not net margins. AMD can (and did) have decent gross margins, while suffering a net loss. For instance, AMD had a gross margin of 28% for Q3, and 34% for Q1-Q3 combined. I didn't check NSM or IDT, but would expect them to have positive gross margins as well.

The point? Simply the same one that has been preached for quite some time: gross margins are not nearly as important as EPS.

Adam (my opinions only, not Intel's)
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