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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Volsi Mimir who wrote (124486)	9/22/2000 5:39:44 PM
From: Volsi Mimir	Read Replies (1) \| Respond to of 1570635

Friday September 22, 4:40 pm Eastern Time Forbes.com Intel Points The Finger At Europe By David Einstein biz.yahoo.com Is Europe burning, or is Intel putting up a smokescreen? That's the question in the wake of a profit warning issued yesterday by the chipmaker, which cashiered the entire tech sector. After Intel (Nasdaq: INTC - news) said it expected to post a disappointing third-quarter revenue, investors staged an after-market rout that cut more than 20% off the value of Intel shares and also left a laundry list of other technology issues gulping for air. Intel's warning was vaguer than a tease for the ten o'clock news. The company said that due to soft demand in Europe--where it does a quarter of its business -- revenue will only be 3% to 5% higher than the $8.3 billion that clinked into the company's coffers in the second quarter. That's less than half of the growth that analysts had been expecting. Contacted today, Intel officials offered little elaboration, saying that the problem in Europe is one of ``general economic conditions'' affecting all of the company's products. If you want more detail, you'll have to wait until the quarterly earnings are announced on Oct. 17. The big question right now is, does Intel's trouble portend similar problems in Europe for the PC industry? The answer coming from most quarters today is a resounding no. Hewlett-Packard (NYSE: HWP - news) said it's on track to meet forecasts for the current quarter. Compaq (NYSE: CPQ - news) went so far as to issue a statement that demand in Europe for its computers is within expectations. And International Data Corp. is standing by its earlier projections of double-digit growth in European PC shipments for the third quarter. It's true that corporate PC sales in Europe have been soft. The main reason is that many companies upgraded their computer systems in 1999 during the Y2K scare, so they haven't had to buy new PCs for some time. And since Intel still has the corporate market mostly to itself, that might explain a slowdown in demand for the company's fastest Pentium processors. But that doesn't account for what could be a $500 million shortfall in Intel's quarterly sales, says ABN Amro analyst David Wu. As far as he is concerned, ``Europe is just an excuse.'' Wu says Intel's real problem is AMD, which has been stealing market share away from it. That's especially been the case in the consumer market, where AMD has prospered with its popular Athlon chips. There is the possibility that Intel, as the bellwether of the industry, is giving us the first signs of a downturn in a European economy already beset by soaring oil prices and a sagging euro. If the continent does go sour, you can expect every tech company with lousy earnings to point the finger at Europe the same way they turned Asia into a scapegoat during the economic turmoil there in the late 1990s. For now, however, Intel looks like Chicken Little in a bunny suit.