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

To: pgerassi who wrote (141250)	8/10/2001 12:13:16 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 186894

Peter,<<<To get back to $6.3 billion in revenue, more units would need to be sold or the mix would have to trend to higher ASP processors. The later is very unlikely in a down market and results from third parties show that if anything, the PC market is shrinking in Q3.>>> I don't mean to bust in on your discussion here and am not being facetious (I don't the answer) , but how do you account for the 1.5M units of the Xeon processors that are sold each quarter? What are your estimates (upper/lower bound) ASP and market share for Xeon processors? You have to also consider that SUNW is losing market share (precipitiously) in this market and server units remain flat - is Xeon gaining market share here? Mary

To: pgerassi who wrote (141250)	8/10/2001 12:56:45 PM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

Pete, let me give you a few examples of shady numbers that you have put in your very own response. I hate having to dissect your post here, but you have asked me to present you with proof. <<As to where I got $8 just divide Intel's GAAP profits for the quarter and divide by the claimed units sold in Q2.>> I didn't think Intel gave out processor unit sales. Do you have a definite number here to show me that $8 is indeed what you get? <<Intel's plan for Q2 was 4 million units, but almost everyone else estimates that number to be somewhere between 1.5 and 2.5 million units. I took the middle of that and used 2 million units.>> Please prove to me that this is anything more than a WAG. If you want to show me a meaningful analysis, you are going to have to use facts, not the average of a wide range of estimates. <<NOw if all the ASP drop came from just P4s, you take $8 and multiply by total units and divide by P4 units and you get about $110 drop in P4 ASPs.>> You cannot come to this conclusion, based on the fact that you made up the numbers for P4 units and total CPU units. That's why I don't like your numbers. You have nothing to back them up, other than pure conjecture. <<Given Intel's past history of not producing much of a just released grade for a couple of months, no significant quantity of 1.9 and 2.0 P4s will be sold (the point at which Intel claims the revenue per statements). Thus, it is the prices of the P4s in current production ASPs. These prices are dropping about 40% to 60%. Take the average (usual for rough calcs) of 50% and you are close to the above required drop.>> One, instead of assuming 1.9GHz and 2.0GHz numbers are small, you assume they are non-existent. Two, you are taking the 50% number out of thin air because you have no real data to insert here. The actual number here, in addition to the actual volumes of high end skus sold, can throw your results completely off. <<Thus there is a good chance that all things being equal, Intel will experience a breakeven quarter in Q2.>> I assume you mean Q3, but in any case, this is not what you said to Tenchusatsu. You said, "What would Intel stock do when the "L" word comes up for their Q3 report? Crash, crumple, crinkle, panic!", which caused Noel to respond in an equally derogatory manner, and then which caused me to respond about how this relates to Intel's earnings guidance. However, instead of addressing why Andy Bryant and Paul Otellini guided Q3 revenue between $6.2 and $6.8 billion, you are instead accusing me of being, "back on the shadowy world of 'But, I do not like yur numbers' and 'Numbers out of thin air!' arguments are just that." The fact is I don't like your numbers, and many of them are out of thin air. Will you address any of these concerns? <<P4 costs more to make than a P3. Estimates range from $20 to $40 dollars each die packaged and all. I estimated the ASP loss to be about $10 and the cost rise to be $30 the average of the above.>> In other words, you have no idea. Your estimation can be dead-on or completely off. Again, you are applying a Wild Guess to derive (what you think) are "factual" results. <<If Intel gets all 6 million to switch (assumes no growth in overall units and 8 million P4 produced for Q3 sales), an additional $240 million (6 million times $40 ($10 + $30)) would be lost in profits.>> Here you prove my last point, and the point of my previous posts. You are giving a "what if..." condition based on several data points that were guesses at best. Your result is therefore meaningless. <<results from third parties show that if anything, the PC market is shrinking in Q3>> Where does a single third party say that Q3 will shrink q-q over Q2? <<the best that can likely be achieved is sales of median ASP processors ($164 at last estimate for Q2). Since claimed gross margins are 48% (per Intel Q2 CC), an upper bound of average profit per CPU is $79 (48% of $164). Now divide $217 million by $79 and you get just shy of 3 million CPUs. Thus to break even in revenue (Q3 matches Q2) requires Intel to sell 30 million units in Q3. Now that is practically impossible given current conditions...>> So here you are using an estimate of $164, and then using that as a key piece of data in all the other equations. If you are wrong about that data, then your conclusion is wrong. But even assuming you're close, you say that it is impossible for Intel to sell 30 million processors. Yet, you have no idea how many they've sold so far this quarter, nor how many will sell in the next month and a half. All the things that you are using to make your argument are either estimates or opinions, and that doesn't prove anything. <<Or is it that you are to lazy to do so and thus, simply cop out without showing the proof behind your thinking?>> You clearly want to come out of this argument justified that your data is correct. I hope I've shown you proof behind my thinking, but I hope you can be a little more decent in the future, and not go for the same cheap shots that you accuse others on this board of doing to you.