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To: dale_laroy who wrote (35718)	4/14/2001 8:26:18 AM
From: niceguy767	Read Replies (1) \| Respond to of 275872

dale: "What I mean by disappoint is that Intel will meet the revised analysts projections. You are probably right about Q1 being Intel's high quarter for the year. Q4 will probably be the closest to Q1, with Q2 being abysmal, and Q3 possibly a loss. But I think Intel will close out the year with at least 35 cents earnings per share for the year. And this will probably be closer to 50 cents per share than 35 cents per share. Then we are both on the same page...I just don't see INTC at $28 on Q1 earnings of $0.25 or less and trending negatively by all indicators for the rest of the year and I don't see INTC holding at $28 if their Q1 revenues decline by more than 10% sequentially...I know management guided a 25% sequential revenue decline, but I just can't believe that $28 discounts such a calamity occurring in the house of INTC...If the market believed 25%, INTC would be in the teens right now...Reality bites and when a real sequential revenue decline greater than 10% and a real sequential eps decline of certainly more than 20% are recorded on Tuesday, I'd guess there's at least a 50% probability of a significant INTC devaluation...If, in fact, INTC's sequential decline is greater than 20% and sequential eps decline is greater than 30%, then I'd up the probability to 80%... Exciting times at INTC this week...Could see $30 or $25 before earnings...Might see a low between $17and $22.25 after earnings...INTC's 52 week low of $22.25 set earlier this month is likely to be replaced by a new 52 week low later this month, if not on Wednesday of this week!!!

To: dale_laroy who wrote (35718)	4/14/2001 9:38:24 AM
From: niceguy767	Read Replies (2) \| Respond to of 275872

dale: <font = red> INTC expected to post slashed earnings </font> That's the banner (Bloomberg release) in the business section of the Toronto Star today... Tidbits from the article: Poll predicts Q1 at $0.15 (greater than 50% decline in eps year/year). Sales will drop sequentially by $2.2 billion (that's right $2.2 billion or 25%) to $6.7 billion and gross margin will drop to 51%. Worldwide PC demand has plummeted in Q1 to 30 million units shipped from a Q4 level of 36 million...and if that's not bad enough, non-processor revenues (20% of INTC sales) for Q1 and orders for Q2 are absolutely horrible according to Dan Niles and as a result INTC's communication and flash businesses will probably operate at a loss for most of this year... If PC demand in Q1 has dropped 20% from Q4, I'd have to think that INTC's units shipped will have dropped by at least 20% and if margins are 51% that could be close to a 13% sequential decline...The combined effect of declining number of units shipped and decline in margin by 13% could result in an incremental decline in profit of $2 billion...Assuming the capital investment arm's reserve is now exhausted, the $700 million or so that propped up earnings for every quarter last year results in an additional incremental profit decline of around $700 million...and that assumes that INTC isn't required to write down its capital investment portfolio... The point of all this is that the spectre of negative Q1 INTC earnings cannot be ruled out...further, INTC is quite likely to guide for a further revenue decline in Q2, which, if true, will surely open the door to negative earnings, assuming INTC escapes the "neagtive earnings" fate in Q1... Let's recap: 1. INTC units shipped in Q1 could decline by 20%, maybe even 25%, sequentially and suffer a further decline in Q2. 2. INTC's margins, now 51% vs. Q4's 63% are eroding more rapidly than at any time in their history. 3. non processor businesses which account for 20% of revenues have fallen off a cliff and as a result are looking at operating at a loss for the remaining months of the year. 4. The capital investment arm has taken a beating and can no longer contribute its 33% of eps value...In fact, it might now drag on earnings (perhaps significantly so) if write downs (i.e INTC has to book investments at the lower of market or cost) are required. 5. P3 and celeron are in their twilght months as the entry level will be 1 gig by the end of Q2, a level atwhich they can't apparently produce in major volumes. 6. P4 has too many hurdles in front of it to offset in any significant manner the eroding margins and declining market shares stemming from the quickening obsolescence of the P3 and celeron. 7. Mobile, server and workstation spaces, which hitherto have been uncontested by AMD, are about to be assaulted by the palomino family of processors, reinforcing negative pressure on INTC margins which are already under siege in the consumer space owing to the spry Athys presence... Just not a pretty sight at INTC these days!!!