Intel quarter was terrible:
FACTS:
29% DECREASE in profits. .66 vs. .92 last year. Shipments of microprocessors down this Q vs. last Q. Gross Margins: 49% vs. 54% due to write downs(Street spin for tomorrow), cost of components for Pentium II, and FALLING CHIP PRICES.
Forward: Revenues slightly higher or even vs. April to June. In other words, well below last year comparatives once again.
Spin: Success at cutting costs depressed net income, if it wasn't for that, INTC would have beat depressed numbers.
Kurlack: now way he upgrades! Based on what? Slightly higher to flat revenues going forward? Growth, not surprisingly came form low end Celeron. If INTC wants to continue to grow as it has in the past this will not do it for them.
Also, integrated processors, a chip on a chip, will become the next big thing to hit the market. Audio, video, everything on one chip. These chips will have higher margins, but they are expected to shrink the overall chip market, and others, including NSM(which sucks) are going to come out with products of their own to compete with INTC.
INTC may recover somewhat and return to growing revenues, but the glory days of big sequential growth and a sky rocketing stock price for INTC are over.
Longs, resistance for INTC is at $85, use your heads and short some to hedge if it manages to push up to that price in the next couple of trading days before it moves back to the low $70 range.
Longs, ask yourself a simple question, "Is INTC going up from here never to back below the opening price tomorrow." If your answer is yes, then just stay long and play the ignorant fool. If you believe that INTC may move lower at some time in the near future, then short 10% of your position, it's simple common sense investing.....
Vinman
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