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

To: Paul Engel who wrote (136743)	6/6/2001 8:22:30 AM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Paul, re: "Intel has spent nearly 30 years driving its microprocessor engine . To expect profitability in new businesses - communications - that Intel has only been in for a couple of years - against competitors with MANY MORE years of experience - is unrealistic in the short term." It's not so much the fact that Intel loses money in it's other businesses, it the amount of the loss. 23% of their business (based on revenue) decreased Intel's operating earnings by ~ 62% last quarter. One of the most profitable companies in the world is having it's profitability threatened by their communications investments. Some companies make acquisitions that are actually accretive to earnings. I understand that Intel is trying to set a new standard, and that's an investment process. And I can't argue with Intel's judgement on trying to expand into new businesses. But good arguments could be made against their judgement on which businesses they entered, the gross amount of the investment risk, and their expansion strategy. The net result from a shareholders perspective, to date, has been a disaster. This makes the arguments much more convincing. The only good (or maybe bad) news I can devine from the earnings reports is that the gross operating loss in "other" is closely linked to revenue from "other". They must have a lot of fixed v. variable costs. IF they can turn around the top line, the bottom line should become less onerous. As the "other" business go, so goes Intel. It's the key element of the earnings, and will determine the stock price. Any incremental increase in IAG profits can be swamped by an increase is "other" losses. Any incremental decrease in IAG profits can be easily overcome by lower losses from "other". I'm holding the stock, and that's a bet that Intel management is making good decisions in their communications division. But I'm going to remain very skeptical until I see some improvement. John