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.

Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (85373)	7/13/1999 12:45:00 AM
From: puborectalis	Respond to of 186894

Monday July 12 5:50 PM ET Intel Seen Reporting On-Target Second Quarter SAN FRANCISCO (Reuters) - No. 1 chip maker Intel Corp. (Nasdaq:INTC - news) is expected to report second quarter earnings Tuesday that are in line with analysts' expectations, with revenues expected to decline from the first quarter, as a result of its aggressive pricing and some slower PC demand, analysts said. ''I think this quarter is going to have very little in way of surprises,'' said Mark Edelstone, an analyst with Morgan Stanley Dean Witter. ''I'd expect (earnings) to be in line with consensus...If there is any upside, it will be from margins and the continued focus on cost cutting.'' According to First Call, which tracks analysts' estimates, the consensus is for 53 cents a share. Intel's shares fell 81.25 cents to $65.4375 in active trading Monday. In April, when Santa Clara, Calif.-based Intel reported its first quarter earnings, it forecast that revenues in the second quarter would be flat to down from first quarter revenues of $7.1 billion. The second quarter is typically slower than the first quarter. ''We estimate that units were up a strong 20 percent, year-over-year, and down sequentially only modestly to about 25 million units,'' said Ashok Kumar, an analyst with U.S. Bancorp Piper Jaffray, adding that 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. ''This is due to aggressive pricing against AMD (Advanced Micro Devices Inc. (NYSE:AMD - news)) and an incremental opportunity at the low-end afforded by Cyrix (National Semiconductor Corp. (NYSE:NSM - news)) departure,'' Kumar added. National Semiconductor, based in Santa Clara, Calif., announced in May that it would exit its Cyrix PC processor business and late last month, it sold the Cyrix processor business to Via Technologies Inc., a Taiwanese chipset company. National is retaining the part of Cyrix that is focused on chips for set-top boxes and other smart devices. Intel and AMD have been engaged in a pricing war at the low-end of the PC market, where AMD competes with Intel with its K6 microprocessor family. Sunnyvale, Calif.-based AMD has already warned that its second quarter would have a bigger-than-expected loss, due in part to these price wars. But analysts said that Intel is able to offset the pricing pressures from its low-cost Celeron chips and its relentless price cutting, because of its higher-margin chips, the Xeon for workstations and servers, and the newest Pentium III chips, as well as its own cost-cutting efforts. ''AMD complained about the aggressive price moves by Intel, but I think Intel can afford that because they have so many more segments that can offset that activity at the low-end,'' said Hans Mosesmann, a Prudential Securities analyst, who raised his rating on Intel last week to a strong buy. Intel's cost-cutting and its manufacturing efficiencies are also expected to help the company's profit margins, especially its use of lower-cost packaging materials with its Celeron processor, Edelstone said.