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

To: Tony Viola who wrote (80505)	5/6/1999 5:29:00 PM
From: GP Kavanaugh	Read Replies (1) \| Respond to of 186894

Alex Brown and Sons is not fooled: 04:24pm EDT 6-May-99 BT Alex. Brown Incorporated (E. Klauer/N. Bolton) INTC INTC: Average Selling Prices At The Low End Appear To Be Under Some-Strong Buy Klauer, Erika 212-237-2234 05/06/1999 Bolton, N Quinn (212) 237-2436 BT Alex. Brown Incorporated ------------------------------------------------------------------------------- INTEL CORPORATION (INTC) "STRONG BUY" Average Selling Prices At The Low End Appear To Be Under Some Pressure But Units Are Still Solid ------------------------------------------------------------------------------- Date: 05/05/1999 EPS: 1998A 1999E 2000E Price: 59.69 1Q 0.41 0.57A NE 52-Wk Range: 72 - 33 2Q 0.33 0.54 NE Ann Dividend:0.08 3Q 0.44 0.59 NE Ann Div Yld: 0.13% 4Q 0.59 0.68 NE Mkt Cap (mm):199,006 FY(Dec.) 1.77 2.38 3.00 3-Yr Growth: 20% FY P/EPS 33.7X 25.1X 19.9X CY EPS 1.77 2.38 3.00 Est. Changed No CY P/EPS 33.7X 25.1X 19.9X ------------------------------------------------------------------------------- HIGHLIGHTS: Intel's stock has come under pressure due, we believe, to several analysts' reports citing concerns about Intel's unit growth for the second quarter and potential problems with average selling prices. We do not share these views and believe that Intel's current quarter is still on track. Here are the data points we have gathered. 1. Overall unit growth outlook is solid. While it is still quite early in the quarter, April has seen good unit growth and we do not see any reason to change our forecast in unit growth for the second quarter. We expect that units will slip slightly to the 24-24.5 million range, reflecting typical seasonal trends. In terms of specific products, demand appears to be the strongest for the Pentium III 500 and 450 versions, Xeon 400 and 450 MHz, and the Celerons with clock speeds above 400Mhz. Not surprisingly, we see softer demand for Intel's older products such as Celeron 333, 350 and 366, as Intel moves the market to higher clock speed parts. There has probably been some slight excess supply of these lower speed Celerons but the strong demand from the market is quickly taking up any slack. 2. Pentium III Pricing Is Steady. We see a solid pricing environment overall. All Pentium III products appear to be holding firm in pricing against a backdrop of solid demand. We see the Pentium III 500 MHz price at $515 and the Pentium III 450 MHz at $315. We believe that Intel will attempt to bring Pentium III pricing down to Pentium II prices on a clock for clock basis by the end of the month due to a faster than expected ramp of the 0.18 micron. It is very much in Intel's best interest to make processor buying decisions easier for customers, i.e., Celeron versus Pentium III. This will drive the Pentium III transition. 3. Celeron Pricing is strong at the high end but under some pressure this week at the low end. At the high end, we see that the Celeron 433 is selling for about $125, and the 400 is selling for $100 and that pricing is stable. At the low end, pricing has weakened somewhat this week, with the 366 falling to the $60 level from $65-70 and the 333 down to $50 from the $55-60 level. What does this mean for the second quarter? It is in our opinion too soon to predict exactly what earnings Intel will post for the quarter but so far we do not see any reason to change our estimates. Typically, Intel experiences a slight decline in sales in the second quarter before a modest improvement in the third followed by a surge in the fourth. We continue anticipate a slight dip in Q2 microprocessor units to the 24-24.5 million range, reflecting typical seasonal trends. Intel's market share should increase as a result of an attractive product line up. We expect microprocessor average selling prices will hold steady as strong acceptance at the high end with Xeon processors for workstations and servers continues. The net result should be a slight decline in total sales to $7.0 billion, while gross margins stay flat at 59%. Our second quarter earnings per share estimate remains $0.54, and our 1999 earnings per share estimate is still $2.38 and our 2000 earnings per share estimate is still $3.00. Our rating remains "strong buy." We would recommend adding to any positions on this weakness. Additional Information Available Upon Request BT Alex. Brown Incorporated maintains a net primary market in the common stock of Intel Corporation. The following stock(s) is (are) optionable: Intel Corporation. First Call Corporation - all rights reserved. 617/345-2500 END OF NOTE GP

To: Tony Viola who wrote (80505)	5/7/1999 3:28:00 AM
From: Joseph Pareti	Respond to of 186894

>Intel's stock has come under >pressure due, we believe, to several >analysts' reports citing concerns about >Intel's unit growth for the second quarter and >potential problems with average >selling prices. We do not share >these views and >believe that Intel's >current quarter is still on track deja vu isn't it ? the kurlak 's fall-out lives after him. IF INTC FALLS BELOW $55 ITS AGAIN A SCREAMING BUY. LOAD UP THERE. THEN CASH in SOME PROFITS AT 65 AND KEEP SOME FOR THE NEXT QUANTUM LEAP (i guess you would not want to apply the last part of the equation to AMD :-)