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To: johnsto1 who wrote (35816)	9/22/2000 1:15:36 AM
From: johnsto1	Respond to of 57584

Briefing... Updated: 22-Sep-00 General Commentary The equity market has been in desparate need of a positive earnings pre-announcement from a bellwether company. What it got instead was a warning from a bellwether company that promises to weigh heavily on the market at the start of tomorrow's trading. The company we are referring to is Intel (INTC 61 31/64) and the warning it announced has been tied primarily to weaker demand in Europe. Because of the slowdown in that region-- from which Intel derives approximately 20% of its revenues-- the world's largest semiconductor maker has said that Q3 revenues and gross margins should be below its previous expectations. Specifically, revenues should be 3-5% higher than the $8.3 bln in sales reported in Q2 while gross margins should be 62%, plus or minus a point. After its Q2 earnings report, Intel had suggested gross margins for Q3 would be roughly 63-64%. Its expense guidance was unchanged as it still anticipates spending to be up 7-9% from the $2.2 bln in Q2. Interest and other income, however, should be about $900 mln which is up from its forecast of $800 mln following Q2. There was no specific earnings guidance given, but the current consenus estimate of $0.41 should be coming down a bit ahead of Intel's actual earnings report on October 17. In the interim, Intel will experience a significant cut in its market cap. It is already trading under $49 per share in after hours action on big volume. As noted above, the fallout will be widespread, particularly in the tech sector. The table below should give you an indication of just how rough tomorrow's open will be. Company Price at Close of Regular Trading Quoted Price After Hours Applied Materials (AMAT) 73 1/2 66 1/4 Microsoft (MSFT) 64 3/16 60 1/2 Dell Computer (DELL) 37 15/16 33 13/16 Advanced Micro Devices (AMD) 27 9/16 23 3/4 QLogic (QLGC) 91 5/8 83 Ciena (CIEN) 114 1/4 106 Sun Microsystems (SUNW) 116 7/16 110 5/16 Cisco (CSCO) 61 1/8 57 Obviously, the immediate fallout will be most noticeable among the chip and chip equipment makers, but the knee-jerk reaction could provide some ample buying opportunities among chip companies that have a communication focus as sales of communication products have been driving record chip sales of late. Remember, Intel's business is basically PC-centric. The contribution from its wireless communications, network communications, and communications products groups is still a small portion of Intel's overall business, accounting for less than 20% of Intel's $8.3 bln in sales last quarter. Having said, the PC OEMs should be notable laggards in tomorrow's trading as well. With respect to communications-centric companies, if you're interested in doing some bargain hunting, you'll want to consider such names as Applied Micro Circuits (AMCC 189), QLogic (QLGC 91 5/8), PMC-Sierra (PMCS 225 11/16), Vitesse Semiconductor (VTSS 86), TriQuint Semiconductor (TQNT 40 1/2), and Conexant Systems (CNXT 47 5/16).

To: johnsto1 who wrote (35816)	9/22/2000 1:20:38 AM
From: WhatsUpWithThat	Respond to of 57584

Nice article, good points, good thoughts. The market will - is - reacting like it's been taken out back and shot. A bit of perspective, I think, will show the collective 'us' the error of that over-reaction. As an IT executive - that is, from an end user perspective - I can tell you their thoughts are bang on. Except for the high-end CAD and math programmes our engineers run, and the GIS gurus, nobody needs PIII 800s (and faster, of course) in my company. It is a problem for those companies relying heavily on desktop computer chips. Unfortunately I made a stupid play today, though it wasn't with much of my account, so I'll feel some pain tomorrow but nothing terminal. My thoughts and sympathies to those that are heavily invested. WUWT