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

To: Brian Hutcheson who wrote (43190)	12/25/1997 2:09:00 PM
From: Night Trader	Read Replies (1) \| Respond to of 186894

Some good news. Here's the latest research from Lehman Bros. Intel should meet 4Q estimates and is 6 months ahead of schedule in moving to .25! ------------------------------------------------------------------------------ EPS -1996-- -----1997-------- -----1998------- -----1999------ QTR. Actual Prev. Curr. Prev. Curr. Prev. Curr. 1st: 0.51A@* 1.10A* 1.10A* 0.90E 0.90E 1.05E 1.05E 2nd: 0.58A* 0.92A 0.92A 0.95E 0.95E 1.10E 1.10E 3rd: 0.74A* 0.88A 0.88A 0.95E 0.95E 1.10E 1.10E 4th: 1.06A* 0.86Ex 0.88Ex 1.00E 1.00E 1.20E 1.20E ------------------------------------------------------------------------------ Year: $ 2.90A@* $ 3.76Ex* $ 3.78Ex* $ 3.80E $ 3.80E $4.45E $ 4.45E Street Est.: $ 3.82E* $ 3.80E $ 4.28E $ 4.11E $4.60E $ 4.66E @-Includes 1Q96 $-0.01 inventory write-down; -Split adjusted; x-4Q97 excludes $-0.06 in process R&D write-off for anticipated acquisition. ------------------------------------------------------------------------------ Net Cash per Share : $5.62 Revenue (1997) : $25.0 Bil. Return On Equity* : 34.6 % Proj. 5yr EPS Grth : 15.0 % Shares Outstanding(z): 1797.0 Mil. Dividend Yield : 0.2% Mkt Capitalization : $126.1 Bil. P/E 1997; 1998 : 18.6x; 18.5X Book;Price/Book : $11.42/sh;6.14x Convertible : None Disclosure(s) : C Puts in Equity unexercised; z-Share equivalents ------------------------------------------------------------------------------ ** MIXED NEWS: 12/29 PENTIUM 2-233 PRICE CUT CONFIRMED; 4Q EPS TO MEET GUIDANCE ------------------------------------------------------------------------------ THE BAD NEWS: MANAGEMENT CONFIRMS PRICE CUTS DUE 12/29 AND 1/23. In discussions yesterday, management indicated that customers were informed quite some time ago that price cuts on the Pentium-2 (P2)-233 would be brought in from the end of January to the end of December. Management also indicated the move was in response to customer requests to accommodate a build to order model with faster new product cycles. Rumors on unannounced price cuts and deals have circulated for the past month, but this is the first confirmation we have had from management. We saw spot prices for the P2-233 drop 20% during the past week from $375 to $306; they declined another 1% yesterday to $302 (range: $290-314). We show Intel's last list price 11/1 at $401 for parts with 256K cache; the spot market price we track purports to be for parts with 512K of cache. WE BELIEVE THE PRICE CUT LARGELY REFLECTS THE FACT THAT AMD-$17 15/16-1 IN THE PAST 2-3 WEEKS BEGAN DELIVERING VOLUME QUANTITIES OF K6-233s. STILL, AT THIS DATE, THESE CUTS HAVE NO IMPACT ON 4Q RESULTS, AND OUR MODELS ALREADY ASSUMED THE P2-233 WOULD BE CUT TO $270 AT THE END OF JANUARY, SO THE ONLY REAL NEWS IS THE TIMING OF THE CUTS. THEY UNDERLINE A MORE COMPETITIVE PRICING ENVIRONMENT AND THE FACT THAT, TO SOME DEGREE, PRICING LEVERAGE HAS SHIFTED FROM THE SELLER TO THE BUYER. THE GOOD NEWS: TIMING OF 0.25 MICRON TRANSITION APPEARS TO HAVE ACCELERATED BY 3-6 MONTHS AT INTEL, SLIPPED 3 MONTHS AT AMD. Intel management indicates the move to 0.25 micron will be nearly complete by year end 1998. That is about 6 months earlier than the apparent schedule 6/3/97 at their analyst meeting. AMD, meanwhile, had been scheduled to be 100% 0.25 micron my mid-1998, but we guess that has slipped by 3 months. So AMD has gone from a claimed lead to claimed parity. THE REAL BATTLE IN 1998 WILL BE INTEL's PUSH TO 0.25 MICRON P2 SLOT 1 CHIPS VS. AMD's 0.25 MICRON K6 SOCKET 7. ALL THAT CAN BE SAID AT THE MOMENT IS THAT AMD IS STILL IN THE RACE.