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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (132677)	4/17/2001 8:26:56 PM
From: Amy J	Read Replies (7) \| Respond to of 186894

<font color=red> Intel's Q1 Conference Call Most important comments from CC: =============================================================== Business to distribution channel is a LEADING INDICATOR and these sales out to all of our distribution channels is now STRONG and this is 25 to 35% of the biz. The PC biz has bottomed out ! =============================================================== First Quarter: ============== Q1 Rev 6.7B Q1 GM 52% Q1 Operating Income 1.3B (or 1.1?) Q1 EPS .16/share Second Quarter: =============== Q2 Rev Est 6.2-6.8B (press release said 6.2-6.7B) Q2 GM Est 49% because lower mp processing costs Q2 Spending on advertisement increase, normal seasonal Discussion: =========== Andy: - Expect (a return to) seasonal pattern for 2001, more strength in 2nd half - Other biz - slower recovery later this year - Q1 had falling demand on all products, all geog, comm still uncertain - Outlook still has high degree of uncertainty - $1B stock repurchase approx - $10.1B in cash - 5,000 employee attrition by end of year - All office building projects stopped - CapEx 7.5B full-speed ahead for 2001, no change there - RND 4.2B spending unchanged -.13 mobile mid-year Paul: - IT expense in Japan increased ********************************************** - Q1: sales out to all of our distribution channels is STRONG and this is 25 to 35% of the biz. ******************************************** - CPU inentory at or near their goal - Exited quarter with low inventory. - 1 million P4 shipped - P4 is the fastest ramp ever - Q1 drop due to economic slowdown and CPU inventories held by customers. - mobile ASP decline to reset for highspeed mobile products, desktop ASP fixed, Server ASP decline - P4 ramp - robust yields ! - April intro for P4 1.7 Ghz - P4/RDRAM systems major customers as low as $1000 (very good) - SDRAM & DDR in Brookdale - good cost - P4/SDRAM for peak selling segment - 688,000 in 288 processor system (missed this) ***************************************************** - Itanium full production this quarter ***************************************************** - McKinley on 3 OS - First mobile processer below 1 volt half watt power - Flash declined (comm inventory correction), but ASP flat - Regained chipset market share *********************************************** - PC biz bottomed out !!! (VERY GOOD) *********************************************** - we expect a seasonally stronger Q4 and growth map is strongest in our history (what's "growth map"?) - .13 ramp, mobile this summer, P4 by year-end - crossover P4 vs P3 production will occur earlier, in late 2001, rather than Q1-02 (good) Q/A: ===== Mark Edelstone: P4 ramp when crossover for .13? A: Paul: Next year, but P4 to P3 crossover in Q4. First Boston: Why full-seasonal pattern? (good question) Andy: We are expecting the old, historical pattern: slightly stronger in microprocessor, weaker in comm, than historical, which results in a combined expected normal historical pattern for 2001. Q: Demal: Why do you feel microcroprocessor business bottomed-out? Is it because of inventory or macro's? What's the driver? (Excellent question: is it macro or something else that drives this?) A: Andy: Not because of macro, but because of three things: a) Business to distribution channel as strong as last. ****************************************************** Business to distribution channel is a LEADING INDICATOR ********************************************************* b) Return (missed this) c) (Customer) Inventories were previously over levels, now they've exited to out or below the goal Q: CPU waffer starts are higher in Q2 than Q1? A: Yes Q: Is P4 goal increased? Is H2 better because demand higher or inventory lower? A: Paul: Production goal is unchanged and we are comfortable to hit the P4 goal for 2001. Increase in transactivity in March, inventory dropped in March, bottom over. Q: Joe Osha: About demand. How can you be certain about Q2 demand? (good persistance) A: Paul: Distribution channel is best leading indicator. A: Andy?: Seasonality driving factor, as oppose to macroeconomics, so not a snap back, but (I think he may have said) normal seasonality from where we are. From new, lower level, seasonality will kick in. Q: A return to seasonality or improved conditions? What about end-markets? IT is weak, doesn't this conflict your belief in return to improved conditions? (good question) A: Paul: A return to seasonality. Not historical growth level, but rather seasonal level. Q: What's driving better demand? A: Not old demand, just seasonal demand. Outside US, things not so bleak. Q: Microprocessor share? A: same as last 5 quarters, plus/minus points, and expect same this year. Q: Beck: Cutting prices on P4 is odd. Your motivation if it's not market share? A: Paul: Health of product is very, very good. 1.7 accelerated. Sweetspots in volume allow us to do that (because 1.7 is there). Q: What about ASPs though? A: Paul: PC desktop Q1-flat. In Q2 we expect some pressures across board (GM to be 3 pts lower, i.e. 51.7 - 49 = 2.7%). ASP dependent upon when Server bounces back. Server bottomed overall, but the very high-end, like 280 processor servers, need more lead-time. Q: Is your comm like Cisco? A: (My note: Cisco's drop was 70% due to Service Provider business and only 30% due to Enterprise business.) Intel is less Service Provider business. Expect recovery at end of this year. Nw comm has softness. Contracts holding in comm (amazing) Q: Movesman: .13 P4, what speed. A: > 2 Ghz. Q: Missed question A: Server drop was more abrupt than desktop, but overall server has stabilized. Mobile has stabilized. Distribution strength like desktop biz. Q: Missed question A: 2B out of fixed-costs Q: Margins driven by? A: Rev hold. ASP Q2 down 3 pts. Pricing & cost increases. A: Japan was first to decline, but is now flat. IT purchases picking up in Japan. A: China/India - double digit growth, good local consumption. China is the 3rd largest PC consumer. Europe more tied to USA. A: Mobile processor - higher price than desktop Q: Because it costs more - more features/higher cost for same speed 1-2 bins higher for desktop for equiv freq A: CapEx - do you spend all 7.5B or achieve savings if equip costs less? Q: We have a specific expense list to buy (End of CC) --------------------------------------- I think the bad is behind us. Regard, Amy J