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

To: James R. Barrett who wrote (74802)	2/27/1999 10:21:00 PM
From: Mary Cluney	Respond to of 186894

Jim,>>>Are you saying that an increase in Gross Margin causes earnings to decrease?<<< Assuming that you are not deliberately trying to confuse the issue, one does not necessarily have a direct relationship to the other. Intel gross margins did increase - take my word for it. >>>On 12/31/97 INTC had trailing earnings of $3.95 On 12/31/98 INTC had trailing earnings of $3.25 <<< On the other hand, what you claim is close enough also to be true. However, let me try to explain what I think happened in some simple terms: EARNINGS PER SHARE Quarters 1995 1996 1997 1998 1999e MAR 0.510 0.510 1.100 0.720 1.100 Consensus est. JUN 0.495 0.590 0.920 0.660 SEP 0.525 0.740 0.880 0.890 DEC 0.490 1.060 0.980 1.190* Totals 2.020 2.900 3.880 3.460 4.700 Consensus est. I believe that the anamolies you refer to is caused by unusual industry behavior where due to competitive pressures Intel experienced unusual revenue growth as a result of some vendor channel stuffing in two quarters of 1997 that make YOY comparisons invalid. If you take a good look at the chart that I have put together, you will notice that if those two quarters in 1997 did not have unusual growth, Intel earnings growth is pretty constant. Intel has instituted measures to ensure these imbalances to not recurr. Please also note the projected consensus earnings estimates for 1999. Regards, Mary

To: James R. Barrett who wrote (74802)	2/28/1999 1:34:00 PM
From: L. Adam Latham	Read Replies (1) \| Respond to of 186894

Jim: Re: On 12/31/97 INTC had trailing earnings of $3.95. On 12/31/98 INTC had trailing earnings of $3.25...Are you saying that an increase in Gross Margin causes earnings to decrease? Earlier I caught you making false statements about Intel's gross margin percentages, and here you are again making factual mistakes that easily could have been checked by going to intc.com and looking at Intel's historical financials. Diluted EPS for 1997 was $3.87, and gross margin percentage was 60%. In 1998, diluted EPS was $3.45, and gross margin percentage was 54%. This seems quite consistent to me, and contradicts your argument. Intel's current guidance is for 1999 gross margin percentage of 57% +/- a few points. Adam

To: James R. Barrett who wrote (74802)	2/28/1999 10:41:00 PM
From: Paul Engel	Read Replies (2) \| Respond to of 186894

James - Re: " On 12/31/97 INTC had trailing earnings of $3.95 On 12/31/98 INTC had trailing earnings of $3.25Are you saying that an increase in Gross Margin causes earnings to decrease? "' What kind of clown are you? You said Intel's gross margins PLUMMETED in the past three years then you pick data from two years ago as your reference point. DId you factor in Intel's increased depreciation? Did you factor in Intel's purchase of Chips & Technology in 1998 and Intel's $800 million settlement with Digital Equipment ? Did you factor in that 40% of the WORLD was in a DEEP RECESSION in 1998? What YOU DID DO IS ONCE AGAIN IGNORE Intel's GROSS MARGIN 3 YEARS ago and their GROSS MARGINS TODAY ! Do some work instead of shooting off your mouth. Go LOOK IT UP ! Paul