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 : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: S.C. Barnard who wrote (13589)	1/14/1998 11:21:00 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

scba, not too kind about Intels earnings beating estimates. I think Kurlack is unset about them beating his estimates by a large margin. Did anybody read article on him in Fortune that I posted? I found it very interesting. I think his calls on Intel are hurting cpq. I thought there would be a little run up today so I sold jul 60 puts and delayed buying insurance to see if I could get a better on the jul 55 puts later on. What do you think about a little pop over 60 prior to earning report on Wednesday? Don't think it will happen this week with options due. If I get them before the split that would give me insurance at 27.5 behind a 30. Sounds too good to be true. Is there a bug in my logic? NW Subj: Intel Earns More Than Expected Date: 98-01-14 10:30:51 EST Intel Earns More Than Expected .c The Associated Press By DAVID E. KALISH NEW YORK (AP) - Higher costs, weaker demand from Asia and a surge in demand for cheaper computers combined to trim fourth-quarter profits at leading chip maker Intel Corp. But Intel still managed to beat analysts' estimates for its earnings, thanks mainly to a lower corporate tax rate. In the latest sign that U.S. companies are feeling the pain of the Asian financial crisis, Intel said Tuesday its results were weakened by slower demand for computers in South Korea and other Asian countries, offset somewhat by strength in China. Intel shares slipped 75 cents to $76.12 1/2 this morning on the Nasdaq Stock Market after the report, which was released after markets closed. Intel, the world's largest maker of computer chips, said it earned $1.74 billion, or 98 cents a share, in the three months ended Dec. 27. That was down from $1.91 billion, or $1.06 a share, a year earlier. Revenue rose to $6.51 billion from $6.44 billion as Intel sold record numbers of its Pentium microprocessors, which are the brains in 90 percent of the world's personal computers. But Intel said it earned less on each chip, partly citing the increased cost of components for its Pentium 2 processor. Intel also said demand weakened for its flash memory chips, which store information when a computer is turned off. Intel also increased the amount it spent on research, development and advertising by 15 percent in the past quarter to $1.45 billion. Several analysts cited a surge in consumer acceptance of a new class of computers costing less than $1,000, which has forced Intel to sharply lower prices to keep up with demand for cheaper microprocessors. Intel cut prices by a steep 23 percent in the fourth quarter and by record amounts during the entire second half of 1997, said Andrew Peck, an industry analyst at Boston-based Cowen & Co. In addition, Intel didn't lower prices in 1996's fourth quarter for the first time in recent memory, making the comparison seem weaker than it might otherwise, said James Barlage, an industry analyst with Salomon Smith Barney. Last year, rivals Advanced Micro Devices and Cyrix made inroads into the market for sub-$1,000 machines, and the price pressure is expected to continue for the rest of 1998. ''The world is no longer willing to pay for high-end microprocessors when you can buy a perfectly good PC for under $1,000,'' Peck said. Intel predicted that its revenue in the current quarter would be flat compared with the final three months of 1997, and several analysts said the company's forecasts indicated the rest of this year's results would remain relatively level. Still, the results beat the expectations of Wall Street analysts for a profit of 90 cents a share and even exceeded speculation that circulated Tuesday in the stock market that Intel would earn 95 cents a share. Intel said the lower tax rate contributed 4 cents a share to its profit. Intel executives said in a telephone news conference that they expect stronger demand for microprocessors to result from chips for powerful business machines. The company also expected increased demand from an emerging class of digital consumer devices, including set-top television boxes that will bring entertainment and information to millions of U.S. homes. For the year, Intel said it earned $7 billion, or $3.87 a share. That was up from $5.16 billion, or $2.90 a share, in 1996. Revenue rose to $25.07 billion from $20.85 billion. In addition Tuesday, the federal government declined to block Intel from buying a leading supplier of computer graphics chips but said it will continue to investigate the purchase. AP-NY-01-14-98 1026EST Copyright 1997 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without prior written authority of The Associated Press.