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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (73579)	1/14/2000 11:11:00 AM
From: Earlie	Read Replies (1) \| Respond to of 132070

To Earlie from Earlie: For the bulls on Intel, herewith a short summary regarding their quarterly release. - Operating revenues are flat year-over-year, and operating earnings are down year-over year. This, in spite of the following items that artificially INFLATED those operating numbers: - Most N. American manufacturers increased their inventories rather significantly in H2, 1999, based on a concern that their component and sub assembly suppliers might not be ready for Y2K. This arcane activity was extremely evident in the box builder environment. In effect, year 2000 component sales were pulled back into 1999. In passing, it should be noted that those excess micros, mother boards and memory chips currently piled up in the box builders' warehouses will need to be washed out during Q1 and Q2, the slowest quarters of the year. - Intel bought a bunch of companies this past year. The revenues from those acquisitions should have moved Intel's operating revenue line UP dramatically in Q4. They didn't. - Intel plays the "write-off-everything-in-sight" card whenever they buy a company. This artificially inflates the profit contribution provided by the new acquisitions' revenues, as their respective expense lines have effectively been swept clean. This is pure and simple accounting legerdemain (note the big write-offs again this quarter). Once again, this bonus did NOT bump up Intel's operating results. Does this suggest something? - Intel announced "record UNIT shipments of micros, motherboards," etc, yet the operating profits, even buoyed by the above-noted items, were DOWN. Does this suggest that the price wars are really starting to hurt Intel's operating profits? Intel made a bundle on its stock sales. Good for them, but those results sure as heck should be reported separately, and not be lumped in with the standard business results, (particularly when the company uses the "one-time-only" writeoff game). Intel is EXPANDING production? Brilliant timing, given the corporate exodus from the PC purchasing arena (2/3 of all PCs). Aside from AMD's Athlon stick-in-the-eye, Intel now has to respond to the Transmeta threat. In a perfectly timed announcement, Transmeta announced the near term availability of their new "Crusoe" micro, which operates at an order-of-magnitude lower power consumption than does Intel's current crop. Hello portable and notebook sales! (which is one of Intel's few bright lights). Even if Intel's reported results represented operating activity, as opposed to stock market trading, the results would not support the current growth stock PE multiple. Even with many acquisitions, Intel is not providing growth, nor has it for some time. Buying Intel at current prices should be recognized for what it is,.... a bet on the company's ability to continue to sell off stock holdings at current grossly inflated prices. Are better hedge funds available at lower PE's? (g) Best, Earlie