Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Petz who wrote (64988)	7/12/1999 7:37:00 PM
From: kapkan4u	Respond to of 1578966

<John - re: Ashok Kumar expects Intel's ASP's dropped 10% in one quarter - his expectations for revenues of about $6.6 billion is due to a drop of 10 percent in average selling prices from the first quarter... > Kumar used to work at Intel and as Chuck has noted probably has inside information on Intel's financials. I believe he has been lowering his revenue estimates from 6.9B in the beginning of the Q2 to 6.6B now. ASP drop of 10% is severe. And yet he has a strong buy on Intel. There is a disconnect here. I guess his sources don't like downgrades. I rub your back you rub mine type of relationship. Kap.

To: Petz who wrote (64988)	7/12/1999 8:22:00 PM
From: Charles R	Read Replies (1) \| Respond to of 1578966

Petz, <Ashok Kumar expects Intel's ASP's dropped 10% in one quarter - his expectations for revenues of about $6.6 billion is due to a drop of 10 percent in average selling prices from the first quarter....> Thanks for the link. If the ASP erosion is right, Intel ASPs would have slipped under $200. Pretty interesting. Let's assume the guy is right and see the math - slightly lower units (say 2%) at a 10% lower ASPs. That is an approximately $700M shortfall in revenues. Flash is up say $50M. Networking, lets's say another $50M. Channel stuffing, another $100M. Viola! That brings it to $6.6B number that Ashok states. On the profit side, the picture is somewhat different. The $700M revenue drop is purely coming out of gross margins. Let's say Intel squeezed out 5 points (very generous) since last quarter in cost reductions. This gives you $350M (approx on $7B). Let's say another $50M comes from Flash (additional revenues on flash are pretty much pure margins). Let's throw in another $50M from Networking and channel stuffing. Let's throw in another $100M investment income (all those internet ventures and puts got to give something) So, there is still another $150M shortfall. That is about 4 cents short from last Q. That makes the 53 cents that Ashok forecasts. Tomorrow should be interesting. Chuck