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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (11769)	7/17/2001 11:09:14 PM
From: Chris	Respond to of 52237

intc recap from briefing 19:04 ET ****** Intel (INTC) 29.90 +0.77: As the muted reaction in the stock (down fractionally from 4pm close) indicates, there was not much of a surprise in the report or the conference call. The chip giant reported Q2 EPS of $0.12, two pennies better than the First Call consensus. Revenue of $6.33 bln was in-line with consensus. The company's architecture business was fine as microprocessor, chipset and motherboard unit shipments were up sequentially. On the call, the company went further and said that this side of the business has returned to normal seasonal patterns and customer inventories are returning to normal. However, the communication side (flash/wireless) of the business is in poor shape. Holders of flash chip stocks such as SSTI, SNDK have certainly heard that before. While that's a blemish, that was not a surprise and it's the architecture side that drives Intel's stock price...The most positive part of the call and, judging by the number of questions, very important to sell side analysts is the very quick ramp of Pentium 4. The company expects to fully transition out Pentium 3 into Pentium 4 for desktops by the end of the year. This will hurt margins in the near term as it's a lower price, but costs to produce P4 will decline over the next few months which should return margins to normal levels....The guidance provided was good and bad. Good that gross margin estimates were reduced by only 100 basis points, which is not that bad considering such a rapid shift to P4. Bad because the Q3 revenue guidance of $6.2-6.8 bln vs Multex consensus of $6.67 bln is very wide. It's hard to gauge just how well the company expects to do. Also, mgmt conveniently created the collar to include the consensus estimate so it cannot be called a warning. Bottom Line: Not a whole lot new here. We do not view this as a buying opportunity simply because they did not warn, so it's safe. While there is probably not a whole lot of downside, there is little in terms of a catalyst (P4 notwithstanding). Some concerns: PC sales are still very weak, transitioning to P4 may not go as smoothly as expected and it's still unclear if Microsoft's release of XP will drive enterprise customers to upgrade. -- Robert J. Reid, Briefing.com