More on INTC "shortfall". This one from Reuters. Jeff
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Intel stock falls on rumors about Q1
Tuesday, March 9, 1999 09:41 PM
(Adds analyst comments)
SAN FRANCISCO, March 9 (Reuters) - Shares of Intel Corp., the world's largest chip maker, dropped Tuesday amid market rumors the company would pre-announce a first quarter earnings shortfall amid a weak environment for personal computers.
Intel (Nasdaq:INTC) declined to comment on the rumors, which fueled a 3.6 percent drop in its shares. Intel's shares closed down $4.31 to $115.31, with over 22 million shares trading.
"I can't comment on market rumors," said Tom Waldrop, a spokesman for Santa Clara, Calif.-based Intel.
The drop in Intel shares came a day after the company announced a settlement with the Federal Trade Commission just before its antitrust trial was about to begin in Washington. On Monday, Intel shares jumped $5.00 to $119.63.
Traders and fund managers said they had been hearing the rumor in the last hour or so of trading and they were not surprised by it, given the current PC industry environment.
"Just based on what we know about the PC business, it wouldn't be too surprising if things were a little bit light," said one fund manager who asked not to be named.
Earlier this month, the world's biggest PC maker, Compaq Computer Corp. (Nyse:CPQ) warned of weaker-than-expected demand for personal computers.
Last month, high-flyer Dell Computer Corp. (Nasdaq:DELL) reported slower-than-expected fourth quarter revenue growth.
But analysts who follow Intel said that each quarter has been rife with rumors about Intel's earnings, and last quarter the rumors went in the opposite direction.
"Expectations have been getting out of wack," said Ashok Kumar, a Piper Jaffray analyst. "The company's guidance has always been flat to down (revenues versus the fourth quarter)...Will there be a shortfall relative to expectations, yes, will there be a shortfall relative to guidance, no."
In January, when Intel reported fourth quarter earnings, it forecast that first quarter revenues would be flat to down versus the fourth quarter.
According to First Call, the consensus for Intel's first quarter is $1.10 a share. Kumar said he has not changed his estimates, which are around $1.10 a share.
Analysts said news of a significant loss in the first quarter from Intel rival Advanced Micro Devices Inc. late Monday was also putting pressure on chip stocks Tuesday.
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