Here was my guess 3 months ago; let's see how foolish I look at 4:30
From: Eugene Kearney Thursday, Oct 16 1997 12:36AM EST
Reply # of 45016
To David and others:
Look, I took a basic breakdown of the numbers, like I said. Here is a complete assessment, since we are getting suggestions of an even lower than .88 number next quarter.
INTC had revenues of 6.155 and they say they will be flat to up. I will pick up to 6.30.
INTC said gross margins will be flat to up. Cost of sales was 2.604. Lets raise that to 2.620, which will raise the gross margin slightly.
INTC said r&d and mg&a will be up 10-15%, because of increased seasonal ads and more r&d. This number was 1.262 this quarter, so lets raise it to 1.400 for the 4th quarter.
If you follow me, we end up with operating income of 2.280 in the 4th quarter, vs. 2.289 in the 3rd.
INTC says interest income will increase, but only to 160 million, in the 4th quarter.Iterest income was 151 million this quarter.
So what do we get? The exact same number, 2.440 before taxes.
We don't know how many shares, but INTC has at times bought so many shares back, that the number has decreased.
It is highly unlikely that INTC will earn less in this next quarter, it is simple addition, if you believe their guidance. The 10-15% increase in r&d and advertising is on a 1.262 billion base, while the increased revenues are on a base of 6.155 billion. A 7% revenue increase will blow earnings up to the high .90's. Do you really think that is unlikely in the quarter following the typically slower 3rd quarter?
Here is a bet INTC hits .95 this quarter, followed by 4.40 next year.
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