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

To: nihil who wrote (87978)	9/8/1999 8:04:00 AM
From: Process Boy	Read Replies (2) \| Respond to of 186894

nihil and Thread - Kumar comments on INTC Sorry if this was already posted. I find the breakdown of the product mix interesting. Comments about AMD also. PB ====================================================================== smartmoney.com Intel Sinks Despite Glowing Kumar Report By Monica Rivituso A WELL-KNOWN Intel (INTC) bull came out with positive comments on the chip giant this morning, but the stock wasn't budging. By 12:30 p.m. ET, in fact, it was down 1.3%, while the rest of the chip stocks rallied. Ashok Kumar at U.S. Bancorp Piper Jaffray released his 2000 earnings estimates for Intel, upped his share-price target to $100 and reiterated his Strong Buy rating. But Kumar noted in his report that "investors tend to be manic/depressive about Intel." Color today one of those blue periods. Intel shares, of course, have had an impressive run. Since the beginning of July, the stock has soared 40%, and was a big gainer in Friday's rally, hitting a new high. The chipmaker is benefiting from strength in the U.S. consumer market, recovery in Japan and its own market-share gains. All of this translates into strong demand, Kumar said, and it helps that the company's aggressive push into the low-end market seems to be stabilizing. When Intel and Advanced Micro Devices (AMD) were battling hard to grab share in sub-$1,000 PC market, the worry was that selling cheap chips would plunder Intel's margins. But now Kumar expects growth for Intel's low-end Celeron chips to remain flat sequentially at about 35% of the product mix. And that should protect margins. For the September quarter, Kumar expects revenue will grow 16% sequentially to $7.8 billion, or 65 cents a share. That's considerably higher than the First Call consensus estimate of 56 cents. He thinks unit shipments will grow 18% sequentially to just under 30 million units. And in the in the fourth quarter Kumar thinks the company will generate $8.3 billion in revenue, producing 69 cents a share in earnings. He predicts Intel will earn $2.85 a share for 2000. Kumar broke down several aspects of Intel's business. While the Pentium III is selling well, mobile products are only expected to post modest growth in the second half of the year, because of LCD constraints. Meanwhile, the Xeon family of chips designed for servers and workstations stands to grow from its current 1% of total unit volume because of the upswing in the server market, Kumar said. As for AMD's 650 MHz Athlon chip, Kumar isn't worried. Though the product is faster than anything Intel has on the market at the moment, Kumar said Intel will release a faster Pentium III chip by the end of October called Coppermine. In the meantime, he added, the Athlon is running into problems with motherboard availability, which is spoiling OEMs (original equipment manufacturers) on the chip. "We estimate the December quarter sales for the Athlon will be no better than 60% of the planned ship rate of about 1.3 million units," Kumar said. "Intel continues to benefit from incompetent competitors."