Richard - Re: " do you think the $4ish earnings estimates are accurate?"
Well, Intel has earned $1.10, $0.92, $0.88 and $0.98 for the four quarters of 1997, a total of $3.87/year (ignore rounding errors).
If the last quarter is typical for the next 4 quarters, Intel will come in just shy of $4.00
Now, five (at least) forces will be at work - 1. Regular, periodic reduction in prices for existing, microprocessors; 2. Introduction of new Microprocessors with higher prices; 3. Overall uncertainty of the market place - S.E. Asia currency problems, etc.; 4. Growth of non-CPU business and 5. Internal control of expenses, R & D, etc.
Items 1 & 2, which are always at work, well potentially offset each other. Item 3 is a big wild card; Item 4 may be a positive with steady pricing of Flash, new Flash products, and increased sales of networking products. Item 5 can be "adjusted" by Intel if necessary.
Intel has accepted analysts's estimates of about a 17% increase in unit CPU sales for 1998 as being realistic. New product and process transitions (0.25 micron) will help reduce costs.
So, big surprise - S.E. Asia and its ramifications will hold the key.
I can't predict that our come. If it is minimal, $4.00 should be a slam dunk.
If S.E. Asia precipitates world-wide currency turmoil - all bets are off.
Paul |
