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

To: Amy J who wrote (176556)	1/15/2004 5:59:43 AM
From: A. Edwards	Read Replies (1) \| Respond to of 186894

ML raised EPS and reiterated BUY 1-15-2004 ML morning call • Intel reported earnings that were ahead of our expectations even after adjusting for tax benefits that we hadn’t expected. Earnings per share of $0.33 were well ahead of our $0.25 estimate, and would have been $0.27 had the extra tax benefit not materialized. • Gross margin for the quarter, at 63.6%, was above our estimate of 62%, but benefited from an inventory build in advance of the launch of the Prescott microprocessor. • Intel’s outlook for the first quarter was conservative, as we’d thought it would be, but we expect revenues to grow strongly again in 2004 and profit margin to continue expanding. • We’re bumping our 2004 earnings estimate from $1.20 to $1.26, mostly on higher margin. We’re also initiating a 2005 earnings estimate of $1.60. • At 27x our 2004 estimate, Intel continues to trade at a discount to the sector-average multiple of 42x, which we don’t think is appropriate given our positive stance on the sector and Intel’s strong competitive position. We’re buyers of the stock. • Our price objective of $40 is derived from our two-pronged peak earnings and ROOC valuation analysis. The biggest risk to our Buy recommendation is the weakness in the PC market. Microprocessors and chipsets account for over 85% of Intel’s revenues.

To: Amy J who wrote (176556)	1/15/2004 1:03:58 PM
From: Saturn V	Read Replies (1) \| Respond to of 186894

WiFi vs 3G The WiFi hype has given the Centrino laptops a big sales momentum. Clearly WiFi will dominate the home and corporate wireless data networks. However the emerging installed base of "unwired laptops" makes it an attractive target for 3G cellular. One common billing, and much better coverage will appeal to the road warrior. (The public WiFi networks are fragmented, and spotty). The 3G cellular will make broadband available to people who cannot get cable modems or DSL. The Verizon move may be an attempt to preempt the emergence of WiMax which also appeals to the same segment. The installation cost of 3G cellular is pretty reasonable. No need for a new $100K tower, because you can use the existing tower built for voice calls. For Verizon the 3G is an evolutionary upgrade of its existing CDMA infrastructure. And hopefully for Verizon, the availability of 3G cellular will jump start the development of cell phone based high bandwidth applications.