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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: LTK007 who wrote (45661)	8/9/2001 2:45:44 PM
From: ColleenB	Read Replies (1) \| Respond to of 56535

Intel Looking for Second-half Revenue Bounce AUSTIN, Texas - Intel Corp. says it sees reason for hope that the back-to-school and holiday seasons will provide the traditional second-half bounce for computer sales. But some on Wall Street aren't buying the story. Several analysts say there are few signs that the personal-computer industry will rebound any time soon and that the bitter price battle between Intel and rival Advanced Micro Devices Inc. will get bloodier before the fighting stops. That's anything but welcome news for an industry poised to record its first year-over-year sales decline. Intel's stock dropped 5.5 percent Monday to $30.28 and climbed slightly Tuesday to $30.62. Intel Chief Executive Craig Barrett said last week that he expected to see the traditional pickups in demand from back-to-school and holiday buying. But Ashok Kumar, an analyst with U.S. Bancorp/Piper Jaffray, wrote in a research note Monday: "Bottom line is that back-to-school ... has not materialized." However, Roger Kay, who watches the industry for market-research firm IDC, said he's seeing early signs of a back-to-school uptick in buying. "But it's way down from a year ago," he said. "Last year's third quarter was very, very good." Dan Niles, an analyst with Lehman Brothers, predicted this week that Intel will slash prices on its high-end Pentium 4 processors by about 50 percent. The hope is that the price cuts will help Intel on several fronts: thwart some market-share gains by AMD; nudge consumers and corporations to buy new PCs now instead of later; and push the transition to Pentium 4 from the older Pentium III chips. "We believe Intel is planning to detonate a price bomb on AMD by cutting prices ... Aug. 26," Niles wrote in a note to clients Monday. "For those who thought the price war was already aggressive, you haven't seen anything yet." An Intel spokesman declined to comment on the reported cuts, but the company has made no secret that it plans to keep discounting prices to stimulate demand and help Pentium 4 sales. In its second-quarter earnings announcement, Intel said it would cut prices in August to spark Pentium 4 demand. Already this year, the company has announced several hefty price cuts of 20 percent to 50 percent. Salomon Smith Barney analyst Jonathan Joseph cut his earnings estimates for the company, to 8 cents per share from 11 cents for the third quarter. Kumar lowered his earnings estimate to 9 cents per share from 10 cents. Analysts surveyed by Thomson Financial/First Call are, on average, expecting 10 cents. c. 2001 Cox News Service infobeat.com