NTEL WARNED...Just like MOTOROLA warned....
Here's how it goes...CURRENT FIRST CALL MEAN for 2nd QUARTER .75
Last YEARS's 2nd QUARTER .92
From INTEL'S FORWARD LOOKING STATEMENTS (in millions)
2ND QUARTER REV $6,000 (that's an optimistic prediction--same as 1st Q 98 and 2nd Q 97)
COST OF SALES 2,880 (calculated from a Gross Margin of 52%)
R & D and MG & A 1,371 (calculated as 5% higher than current total of 1,306)
OPERATING COSTS
AND EXPENSES 4,251
OPERATING INCOME 1,749
INTEREST INCOME 160 (taken right from the 1st Q Release)
INCOME
BEFORE TAXES 1,909
Income taxes 630 (33% rate from 1st Q Release)
NET INCOME $1,279
PRESENT COMMON SHARED ASSUMING DILUTION ( 1,775 ) (also in millions)
DILUTED EARNINGS PER SHARE $1,279 / 1,775 = .72
It could get worse...make the Revenue--$ 5,900 and take the GM % to 50% and you get a $.66 per share diluted...
HOW is this ROSY? This $.72 is 22 % under 2nd Q 1997
Now take the 1st Q .72 add the est 2nd Q .72 and double it...for the second half...you get $ 2.84
$2.84 for the year...There is no real reason to believe the predictions on GROWTH...especially with PRODUCT MIX moving to lower margin products---THE SUB $1,000 PRODUCTS....THIS WAS THE STRATEGIC INFLECTION POINT THAT MR. GROVE MISSED
2.84 TIMES THE CURRENT P/E OF 20 MAKES THIS A $56 STOCK...
2.84 TIMES A P/E OF 25 MAKES THIS A $71 STOCK |
