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To: Frank Ellis Morris who wrote (77942)	11/11/1998 7:40:00 AM
From: Steven N	Read Replies (1) \| Respond to of 176387

Wed, 11 Nov 1998, 7:34am EST Intel Says 4th-Quarter Revenue May Rise as Much as 10%, More Than Thought Intel Says 4th-Qtr Revenue to Be Better Than Expected (Update2) (Adds analyst comment, background.) Santa Clara, California, Nov. 10 (Bloomberg) -- Intel Corp., the world's largest computer-chip company, said fourth-quarter revenue will rise as much as 10 percent from the previous quarter amid stronger-than-expected demand from personal computer makers. The forecast lifted Intel shares, which rose 1 9/16 to 97 9/16 in regular trading, to as high as 102 3/8. Analysts expect it to bolster other computer-related shares as well. ''If the No. 1 player in microprocessors says demand is that good, that means the whole technology area is going to have a pretty good Christmas selling season,'' said analyst Jack Geraghty of Gerard Klauer Mattison, who rates Intel ''long-term buy.'' Chipmakers are benefiting from rising sales of PCs to businesses and consumers, and are getting an added boost from the back-to-school and holiday shopping seasons. Intel, which struggled with lackluster demand in the first half, also is being helped by its new products for consumer PCs and expensive machines to run computer networks. ''If they can already predict revenue is above expectations, business must be doing really well in the first month,'' said analyst Phil Schettewi of Loomis, Sayles & Co., which owns Intel shares. ''Demand is strong coming up on the holiday season.'' Rosier Forecast Last month, Intel said fourth-quarter sales would be only slightly higher than the third quarter's $6.7 billion. Intel was expected to earn 95 cents a share in the fourth quarter, the average estimate of analysts surveyed by First Call Corp. A year ago, Santa Clara, California-based Intel reported earnings of $1.74 billion, or 98 cents a share, on sales of $6.51 billion. Before the forecast, shares of Intel, Dell Computer Corp. and International Business Machines Corp. rose today on optimism for strong holiday PC sales. PC-related shares are rebounding from an October slump on signs that consumers are buying new computers. PC unit shipments are expected to rise 13 percent in the fourth quarter, their biggest gain all year. ''PC inventories are way down and demand is way up,'' said analyst Stephen Dube of Wasserstein Perella Securities, who rates Intel ''buy'' and now expects fourth-quarter earnings-per-share of $1.00. Dell, which rose 1 5/16 to 70 5/16 today, traded as high as 71 13/16 after the close of U.S. markets. Many technology stocks tumbled earlier this year on investor concern that spending on PCs would slow once the traditionally strong holiday season ends. Intel shares traded as low as 65 21/32 on June 3. Now, with relative calm in world financial markets and persistent signs of strength in the U.S., investors are becoming more optimistic, analysts said. Margins, Expenses Intel said its gross margin, or the percentage of sales remaining after costs of production are subtracted, is expected to widen by a ''couple'' of points from the 53 percent reported in the third quarter. When it reported third-quarter earnings, the company said gross margin would be ''flat to slightly up.'' Expenses will be about 8 percent to 10 percent higher than the $1.4 billion in the third quarter. Earlier, Intel said expenses would increase 3 percent to 5 percent. The company also said it won't complete its previously disclosed 3,000 job cuts this year. At the end of the third quarter, Intel said 2,000 jobs had been cut and the remaining 1,000 would be eliminated by the end of the year. Today Intel said it will have a few hundred jobs left to cut at the end of December. Intel is holding an analyst meeting Friday in San Francisco. Dell, the No. 3 worldwide PC maker, reports fiscal third-quarter earnings on Thursday.