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To: Darren who wrote (60158)	7/14/1998 5:48:00 PM
From: Tony Viola	Respond to of 186894

TT: >>>"On the other hand their closest competitor AMD has no life jacket they also know where the shore line is but they are trying to swim underwater in that direction."<<< Darren: >>>"P.S. Jaws is in the vicinity..." And wearing shoes furnished by Luca Brazi.

To: Darren who wrote (60158)	7/14/1998 5:59:00 PM
From: Darren	Read Replies (3) \| Respond to of 186894

Conference Call -- ...forward looking statements. Risks and uncertainties. Refer to press release for limits on liability. Legal-babble... Andy Bryant: 2Q consistent with guidance of March 1. Reduced demand from OEM's. Customers have made progress reducing inventories.Celeron rapidly to high volume. Unit shipments declined slightly. Margins declined to 48.9 from 54.2 Exceeded production targest in high volume processors. Wrote down inventories to lower product costs, improving gross margins in future. Lower revenue in quarter. Completed acquisition of DEC's chip-making operations in 2Q. Spending declined 12%. Without writeoff, spending is down including expense controls. Repurchased 22m shares, including expired warrants. Inventories declined. Inv levels appropriate for guidelines with volume for quarter. $7.7b in cash. 3Q outlook: Improving conditions. Flat to up on revenue. Sequential growht in 2nd half of year. Gross margins to be 52% +/- two points. Expenses to be 3-5% higher, dependent upon revenue. Company got ahead of itself -- expenses under control, headcount reduced. Continiung to reduce headcount by 3,000 before end of year. RIF may be necessary, primarily through attrition. Equipment purchases will be reduced to $4.5 from $5.0. Capital spending included DEC. Interest $145m. Tax rate unchanged at 33%. Paul: 2Q met expectations. Unit shipments moving to P6, over 50% of quarter shipments. Celeron represented 5% in first quarter. Xeon introduced. Product segmentation looking good. Market share declined marginally. Distributor inventories declined, within guidelines. Asia-Pacific flat. Europe lower. P6 chipsets growing faster than processors. Motherboards flat. P6 boards are growing. Notebook market grew significantly. Shelley: Presentations are available on web site. Q: Scott, FBCO. Inventories (customer) Is guidance lower than previous quarter? A: Within guidelines, supported by backlog and expections. August slow. Q: Dan, RSSF. Revenues were flat. What does Xeon do in Q3 and Q4? Benefits? How does this relate to sub $1,000 pc? A: Xeon will help existing business model margins, much better than lower end machines. Q: Kurlak, MLCO. Unit growth projection? A: We don't provide detail, butthead. Hehehehehe Q: Ken, OPCO. Improvement in inventories? Did this take 6 quarters? 1 1/2 years of inventory compression? A: Q2 not end of inventory adjustment. Manu/Dist are trying to improve inventory models. Ongoing process, getting closer to Just In Time. OEM's earnings will help guide... Q: Phil, Brown Bros. Channel Inventories? Considerable improvement in past few months? Xeon in Q3 or 4Q visible? A: Xeon launched 3 weeks ago, ship end of July. On target. Overall volume in Q3 small, growth over quarters. Re: Channel Inventory; better in US Western Europe, about same in Asia. Q: Seasonal gain, revenue should be slightly up? A: Tough to call 3Q. Starts slow. Orders come in end of September, first of October... Q: Didn't get name. Target of Xeon? Revenues by region are shipments or PC's? A: In general, processors go to end-user relative to region and equal consumption. Xeon; displacement of Pentium Pro to Xeon fast. Q: Tom, Putnam. Q been answered. Q: John, MONT. Can 2.5 micron product guidance be enhanced? Flat margins? A: Inventory valuations lead to writedowns. 3Q shipments offer better margins. Tough call. Upward trend, but not a big change. Q: Unusual level of writedowns? Why this quarter? A: [Break in transmission] Decided to do it in 2Q to contain costs. Q: Jim, SBSH. Historically, trend of margins comment? Excluding writeoff, comment? A: All the pieces in context, within the band.