Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Barry Grossman who wrote (43216)	12/26/1997 5:44:00 PM
From: Sonki	Respond to of 186894

Barry, i agree but you but you are too early. With deep subU (.18u), intel could see savings using AMAT's new equipment (12"wafer). but now, i can not remember where i heard that intel is not moving to 12" righ away. I also here conflicting news on merced schedule. Also, to save/make money one needs to spend first. So in near term we might see more spending ( high salary, new eupiments) then profits in 1999? BWDIK? comments?

To: Barry Grossman who wrote (43216)	12/26/1997 7:33:00 PM
From: Paul Engel	Respond to of 186894

Barry - Re: "Does anyone agree or is it just contrarian me?" I agree and then some. Intel's yields on their existing 0.35 micron process are incredibly high - giving Intel the opportunity to make significant profits on sub $1,000 PCs with Pemtium MMX devices - whereas AMD and Cyrix are at breakeven or in fact losing money in this type of market. Analysts keep yakking about $60 or $70 die costs for Intel Pentium MMX (0.35 micron) chips. I think if they divide by two, they will STILL be a little "high" of the mark. You can project the effects of the 0.25 micron conversion - as you have alluded to. Craig Barrett gave precise information about Intel's defect densities to the analysts for the new 0.25 micron processes as well as the older ones. The 0.25 process defect density is comparable to the older 0.35 micron process - and declining with time as the process runs in ever higher volume. Paul

To: Barry Grossman who wrote (43216)	12/26/1997 10:05:00 PM
From: Night Trader	Respond to of 186894

Some more from the Lehman Bros. report posted on their site last night.Interesting reading. FINE TUNING 4Q EPS UP (STILL BELOW CONSENSUS); NO CHANGE IN 1998. Intel recently entered its quiet period still indicating it was on track to meet 4Q guidance of some sales growth, flat gross margin, 10-15% increase in operating expense, $160 mil. in other income, and a 35.5% tax rate. Intel throughout 1997 has beaten its operating expense estimates, so there is again some upside opportunity from control of this item. We assume 5% sales growth, flat gross margin, and 12.5% growth in operating expense (slightly higher sales growth than previously) and estimate 4Q EPS at $0.88 (old: $0.86) vs. consensus of $0.90. We continue to estimate 1998 at $3.80, 1999 at $4.55. VIEWPOINT: THE BIG DROP IN INTEL's STOCK PRICE IN RECENT MONTHS IS CLEARLY BUILDING A VALUE STORY. NEED SOME MOMENTUM. DON'T REALLY SEE IT NOW. At roughly 3.5x a market sales multiple and 1.1x a market multiple of book, Intel is in the lower third of its historical range. We also believe Intel merits selling in a higher range than the one it has recently enjoyed. Technology stocks, however, need momentum, and we just do not see that now. The principal issue at Intel during the past 9 months has been the reemergence of competition and a consequent much more competitive pricing environment which has pushed gross margins down. Asia-Pacific is also an issue, though the impact of that is less clear currently (30% of Intel's sales are into Asia-Pacific, but about half of that is reexported). WE SEE COMPETITION AS THE KEY NEAR TERM DETERMINANT OF MOMENTUM AND STOCK PRICE. WE REMAIN CAUTIOUS NEAR TERM.