GV, I went over to Yahoo to see if there was any news on Intel and they were talking about a bearish call by Ashok Kumar. The article below doesn't look bearish at all, slight exceptions being:
"Due to weak commercial demand, we expect units to be down modestly sequentially, but up over 20 percent year-over-year," and this:
"From a trading perspective we need to be cognizant of seasonal weakness in second quarter 2000 and that earnings upside should primarily from gross margin expansion and not an acceleration of top line growth."
Of course even these aren't bearish, but more seasonal facts of life in this business.
The rest is great, including predictions of 64% GMs this quarter, 66% exiting the year, and $0.75 EPS this quarter. I just wonder if the remarks about commercial demand in Q1 and Q2 being seasonally weak were singled out today.
www2.marketwatch.com
U.S. Bancorp Piper Jaffray Delivers Quarterly Earnings Preview on INTC; Kumar Sites Primary Positive Trend: Cost Declines Ahead of ASP Erosion
TUESDAY, MARCH 28 2000 10:48 AM EST
MENLO PARK, Calif., Mar 28, 2000 (BUSINESS WIRE) -- US. Bancorp Piper Jaffray Managing Director and Senior Computer Hardware and Semiconductor Analyst Ashok Kumar today provided an earnings preview for Strong Buy rated Intel Corporation (INTC--$139 1/16, #). Intel is the world's largest chip-maker and is also a leading manufacturer of computer, networking and communications products.
"Due to weak commercial demand, we expect units to be down modestly sequentially, but up over 20 percent year-over-year," said Kumar. "In our view, the positive surprise is on gross margins, which are expected to expand about 270 basis points sequentially to about 64 percent. Contrary to consensus opinion, we expect average-selling prices (ASPs) to continue to decline, but an improved cost structure should enable the company to exit the year at 66 percent gross margins."
"Reflective of this, we increased our 2000 earnings-per-share estimate to $3.15 from $2.70," said Kumar. "Our current first quarter earnings-per-share estimate of $0.75 is $0.07 above consensus."
"We continue to maintain that Intel is a core technology holding," said Kumar. "From a trading perspective we need to be cognizant of seasonal weakness in second quarter 2000 and that earnings upside should primarily from gross margin expansion and not an acceleration of top line growth," said Kumar.
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