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

To: Math Junkie who wrote (53095)	4/15/1998 9:30:00 AM
From: Larry Loeb	Read Replies (1) \| Respond to of 186894

Here is the article that I was referring to: Dow Jones Newswires -- April 14, 1998 Street Sees Intel's Rough 1Q As Ancient History,Looks To 2Q By Christopher Grimes NEW YORK (Dow Jones)--Intel Corp. (INTC) isn't expected to give investors much to smile about Tuesday afternoon when it reports first-quarter earnings. Because the company told investors in early March that revenue would probably fall 10% from the fourth quarter, analysts aren't putting much stock in whether it beats expectations. Incidentally, they don't see that happening. First Call's consensus estimate is 72 cents a share, including a 9-cent charge from the Chips & Technologies Inc. purchase in February. In first quarter 1997, Intel earned net income of $1.10, as adjusted for a stock split. SoundView Financial Group analyst Scott Randall said word is that the company will report earnings in line with "or slightly below" the consensus estimate. "I'd say they will be a little light." Randall said. It seems the so-called "whisper number" - the unofficial, last-minute estimate that circulates around Wall Street - is faint this time around. One options trader noted that "the volume is kind of thin. It looks like they're predicting a nonevent." Added Randall: "This has not been a quarter for whispers. Everybody's much more interested in what the outlook will be." For the current quarter, most analysts expect a tepid outlook, mainly because of flat chip orders. Opinion about the rest of the year is divided. How much Intel says it will spend on equipment is one way Wall Street will try to gauge the company's expectations for the second half. If spending to upgrade factories declines, the thinking goes, Intel apparently expects rough sailing. But, holding spending at the projected $5.3 billion level would indicate a more optimistic view. "If they cut spending to $4.5 billion, they're looking at a tough year," said David Wu, an analyst at ABN AMRO Inc. "If they only cut it to $5 billion, they expect a good second half. Watch what they do, not what they say." Another closely-watched figure will be gross profit margins. An increasing number of Intel's chips are Pentium IIs, which are less profitable because costs for packaging and enhanced features are higher than in previous-generation chips. Piper Jaffray Inc. analyst Ashok Kumar expects Intel to predict a continued decline in profit margins. When the company preannounced first-quarter earnings in March, it said margins would be down 17% from a year ago. "That means we probably won't get positive numbers until the fourth quarter," Kumar said. In afternoon trading, Intel shares were up 5/8, or 0.8%, at 76 7/8 on volume of 9.5 million shares, compared with a daily average of 18.1 million shares. The company will report its earnings at about 4:15 p.m. EDT. -Christopher Grimes; 201-938-5253 Larry