Well, since like Intel was short of expectations, no wonder they were not going to speculate earlier! I am little bit in the worry in regards to the computer price slashes for Compaq, IBM, etc. Is this a new trend and would it affect Intel and its earnings potentional in the future. Also, can someone predict a rough estimate of the price at the end of the year for Intel?
The $3.50 came out of Paine Webber, perhaps you should
check with them.
They actually lower it from $3.50 to $3.49 for 4Q on 10/31.
INTC: EDWARD JONES decreased estimate for fiscal year ending
12/97 from $4.00 to $3.88 on 10/17/97
INTC: EDWARD JONES decreased estimate for fiscal year ending
12/98 from $4.75 to $4.38 on 10/17/97
INTC: EDWARD JONES has reiterated estimate for long term EPS
growth of 18.00% per year on 10/17/97
INTC: NATNBK MONT.SEC decreased estimate for fiscal year
ending 12/97 from $3.95 to $3.84 on 11/01/97
INTC: PAINE WEBBER decreased estimate for fiscal year ending
12/98 from $3.50 to $3.49 on 10/31/97
INTC: PAINE WEBBER decreased estimate for quarter ending 03/98
from $1.16 to $0.89 on 10/23/97
INTC: PAINE WEBBER decreased estimate for quarter ending 06/98
from $1.15 to $0.82 on 10/23/97
INTC: PAINE WEBBER decreased estimate for quarter ending 09/98
from $1.17 to $0.89 on 10/23/97
INTC: PAINE WEBBER decreased estimate for quarter ending 12/98
from $1.30 to $0.90 on 10/23/97
EPS looks pretty flat to me.
I AM reasonable. At this point in the last quarter, I think Intel's intimations, and most of the earnings estimates that I saw were about 92 or 93 or so cents per share. Intel came in at 88 cents per share. All right, that's about 5%. If someone had estimated 88 cents on the low side, or 98 cents on the high side, I'd have said: sounds possible.
However, to get to $3.50, you have to predict earnings for Q4 at 60 cents per share. That's while Intel is intimating flat or slightly up earnings. So, Intel is hinting about 90, and this guy is saying 60 cents? Really?? Let me know where I can see this.
If you want to make a nice, safe prediction, like, say, 80 cents, when everyone else is saying 90 cents, then you'll make me think, "Ok, that's a little low, but not way different from anything else I've seen." If, on the other hand, you want to say 60 cents (differing by 33%!), then I'm thinking, "WOW! Where did THAT come from?!?" And I want to know details.
Now, if you think that the good analysts are not doing detailed analyses, then you don't really know much about how they get to their numbers. The fact is that not only do they look, division-by-division, business line-by-business line, quarter-by-quarter,
at sales, expenses, R&D costs, marketing costs, costs of goods sold, gross profit margins, incremental profit margins, expected extraordinary costs and revenues, so on and so forth, but these guys even go VISIT the companies that they analyze, and sometimes even get to peek at some of the books! And, analysts often PUBLISH this information in newsletters, etc.! I mean, Mike, come on, what do you think these guys do to get their numbers, draw straws? Pick numbers out of barrel? So, asking for
the details on an outlandish earnings estimate is altogether reasonable.
Actually, I suspect that perhaps, after the Q3 announcement, that there actually ISN'T anyone estimating FY 1997 EPS $3.50.
Finally, you are really missing the point, Mike. A bunch of folks here are saying, "Buy Intel at 75," because that's about how far it'll go down. I want to know why not lower. If FY 1997 EPS $3.50 were to bear out, then I can't figure why Intel would hold at 75. Or 65. So, anyone who wants to make such a prediction really needs to provide some justification.
Actually, I don't trade stocks at all. I do invest, and not just in tech stocks. I initially started my investments in mutual funds, and have only been acquiring individual stocks for about 2 years now. My goal is to acquire a portfolio of 15 - 20 stocks that represent good, long-term investments.
Don't think you will see 70 because the first stocks new investors buy are intel and microsoft. I really want to short mircosoft but can't stop a herd! It is a little more then gut something like the art of people studying, chart watching, trend predictions, with eps and first call estimates mixed in for flavor. Seems to work???? Maybe I'm just a good monkey? Do you guys trade anything other then tech stocks?
HQ just lowered their ratings on Intel from buy to hold!! Wait for it to go down again in a couple of weeks before buying again.
Just my opinion,
Web Designer of China Art Net
Visit today for your horoscope, Panda Art Gallery, and Chinese Movie Stars!
Heck, you are asking the analysts to furnish you details
for their estimates. Most of them missed their earnings
estimates by 3% last quarter (after 2 downward adjustments...based on Intel's revisions).
If Intel doesn't know the details for the 3Q weeks before it ends, then why do you expect the analysts to give them to you
2 months before it ends?
Don't disagree, just don't think that EPS $3.50 is realistic in this time-space continuum. Such an estimate is a product of too much bad acid. Would not rely on anyone who made such an estimate unless they could show me, point-by-point, why Intel is going to collapse Q4. Flat to slightly higher - or even slightly lower, I'll buy. But even $0.85 would yield $3.75 for the year.
And truthfully, if this is a strong Christmas, with lots of under-$1000 PCs sold, I think that Intel will have an earnings surprise on the upside. Listen, Intel'll make their loot selling all the stuff that they expect to sell at the middle and upper
ends of the market. But if, as per Texomaiceman's suggestion, lots of 2nd PCs , etc. are going to be sold this Christmas, that will be business IN ADDITION TO the sale of lots of servers and workstations and such, which business Intel believes is booming. The irony is, if Intel DOES do a land-office business in sub-$1000 PCs (and according to the Q3 conference call, they've actually oriented an entire product line toward that market) even though the additional business may drag down their overall
gross profit margin a little, they could wind up with significantly improved earnings.
Additionally, their statements in the Q3 conference call, though cautious, were not at all pessimistic. They could be liars. Or they could have taken the same bad acid as your friends who think EPS $3.50 for 1997. And, frankly, I think that what may
surprise folks is that a strong home market may sell more Pentium IIs than anyone would expect. Having been in or near retail PC sales since the early 80s, I've often seen (I've often done it myself) folks starting out looking at the low-end and winding up buying everything but the kitchen sink. Especially since, ironically, games often need more speed than most business apps.
Anyway, no one yet (except Tex, and I'm just not crazy about from-the-gut stock analysis) has provided a rationale for their short-term predictions for Intel. In the final analysis, I'm with Ekurich: except to time more purchases, I don't really care
much what happens in the short-term. I'm not looking for stocks to hold for 3 mos, 9 mos, a year. I'd like to buy stocks the Warren Buffet way: buy low, never sell (if you can avoid it). I'm glad that I'm a long-term investor. Anyone think it'll touch 70 again? Should I tell my broker to buy at 70? Lower?