SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Intel Corporation (INTC)
INTC 34.32-1.2%Nov 18 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Barry Grossman who wrote (41605)12/9/1997 12:53:00 AM
From: Jeff Fox  Read Replies (2) of 186894
 
Barry, re: Understanding Intel gross margin

This is only one example of why [Intel] expects LONG-TERM margins to tend toward 50%. Intel has said they are concerned about TOTAL PROFIT DOLLARS - not margins.

You have it figured it out! Amazing how many analyst have failed to understand that Intel's margin guidance is about new Intel business intiatives, not CPU margin erosion. With the transition to .25 micron process CPU margins should sustain or improve. The lower margin forcast is conservative hedging to allow for "product mix", which is another way of saying that Intel plans to be aggresive about new business ventures to expanded revenue.

Think about it. How many new opportunities can you think of the guarantee 60% gross margin; especially when they are new? You are going to have winners and losers even if your execution is top notch. Intel will go for opportunities that are good business opportunities. Such ventures are great earnings generators at 50% gross margin.

I believe that Intel plans to grow revenue underneath its extraordinary profits to secure the company to a much more sustainable long term business model. This is in addition to CPU market growth.

Jeff
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News