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Intel Corporation Message Board

  • dfrusso dfrusso Nov 4, 1997 1:19 PM Flag

    1997 or 1998?

    True8:

    From what I can tell from your latest, it appears that $3.50 is for 1998, not 1997. And I see no reference to Q4 97 EPS $0.50 (see your title) in your message. If PW is estimating 1997 EPS $3.50, then the Q4 EPS is SIXTY, not FIFTY, cents, anyway.
    Is this so? Please give me the reference (web site, piece of literature, etc.). But this doesn't really fit in the series. (Q3 97: 0.88; Q4 97: 0.60; Q1 98: 0.89; Q2 98: 0.82; etc.). The 1998 EPS DOES add up to $3.50. What is the actual Q4 number from PW? You didn't cite it. Also, being the slow idiot that I am, I don't find these estimates on the web, is there a web site associated with these estimates? I went to PW's web site (www.painewebber.com) but found no way to see any stock-specific
    information. Just a marketing site.

    However, I see that the other two folks that you cite, Edward Jones, and NatnBk Mont.Sec, give estimates of $3.88 and $3.84, respectively, for 1997. Which translate to... $0.98 & $0.94 per share Q4 1997. Astounding! Estimates that are NOT 60 cents per share for Q4 1997.

    As well, Edward Jones reiterates on Oct 17 its 18% earnings growth for 1998 (however, that doesn't exactly add up. According to you, they estimate 1997 EPS $3.88, and 1998 EPS $4.38. My calculator shows that to be 12.8%. 18% would be about $4.58. Which is it? Can you cite the source - web site, literature? (I am slow, you know.).

    Now, we weren't talking about 1998 previously. My complaint was that EPS $3.50 for 1997 (that's Nineteen Ninety SEVEN) seemed outlandish because that would require Q4 EPS of $0.60. But certainly, the range of estimates 1998 will be broader, at this point in time, than those for 1997, since 1998 isn't 3/4 in the books, already. Stick to the subject at hand.

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    • Dear Shawnuff:

      I was mostly talking tongue in cheek, as well. The problem with this type of communications is that all the subtlety is sucked out. Narrow bandwidth.

    • Dear Dfrusso,

      My comment was not serious; sorry, but nothing was yanked. Perhaps you're a latent conspiracy theorist, yourself?
      *joking*

    • Both IBM & Compaq have used non-Intel chips in the past. IBM actually MANUFACTURES most of its own CPUs under license to Intel (if I recall correctly, and this is fuzzy at best, IBM produced there own version of at least one Intel chip), and, I believe, AMD. Compaq has been dabbling with non-Intel CPUs since at least the late 80s.

      Currently (and for some time, now), HP has offerred each of its Vectra PCs with the choice of Intel or one of the two dwarf sisters - AMD/Cyrix (I don't remember which - I've never actually known anyone to not get the Intel option). The problem is, at
      least the way it's MARKETED by HP (I'm not getting into performance arguments here - you don't seem to understand that when there are a variety of competing performance claims about technology products, which there certainly are in this case, the winner is the more stable, larger, better known, more profitable, longer-track record competitor), the non-Intel alternative in each configuration is only about $100 or so cheaper - usually less than 10%. IBM's and Compaq's prior forays didn't significantly
      hurt Intel. I'm not sure that these new ones will.

      As for Dell and Gateway, they currently by their MOTHERBOARDS from Intel. Think Intel'll ship 'em with AMD chips? No? Well then Dell and Gateway have to determine whose motherboards will replace Intel's (these guys are not Taiwanese no-name clones
      who can use anybody's motherboard that they want), or they have to start making them themselves, again. Furthermore, with the acquisition of Chips & Technologies, Intel makes it just a little more uncomfortable for these big guys to stray too far from the Intel fold. There are other factors in history that enter into this - RAM shortages and Intel's significant presence in that market, etc.

      I am assuming that you mean that my faith in Intel is "admirable", not "amiable". In English, "amiable" means "friendly". Not to worry, I have not faith in Intel. I THINK (not believe - faith is the subject of belief) that Intel will do well for the foreseeable future.

      As to my vision, I'm certain that it is lacking. I have publicly stated here that my crystal ball is out of order. I'm not counting on "visions" to make money in the stock market. You keep your "visions", however they're generated. I try to work off the facts.

    • Agreed. Cash is good especially for the next 9 months.
      Don't know if WIN98 will be a big deal, but the perception
      is it will be. The perception will entice upgraders and
      new buyers to step in.

      The only questions are:

      1) When in 2H98 will WIN98 be coming out?
      2) When in 1999 will Merced be coming out?

      I wouldn't be surprised to see WIN98 running on the low end processors. Remember M$ don't care where it runs as long as they collect the licensing charge per unit.

    • The box makers are trying to make an end run on Intel with the sub1000 boxes but when windows98 comes out Intel will be inside the computers we all purchase and remember Merced is coming! I know it is hard to believe but cash may be the best investment for the next 12 months.

    • Dfrusso,

      You missed the point. So far this year, Compaq has
      used non-Intel processors with great success and IBM
      not wanting to missed the boat...decided to join the
      party. If this continues into 1998, then look for
      others to join and break rank with Intel. Look for
      this to accelerate into 1998 as AMD, Cyrix/NSM, IDTI
      ramp up production.

      When was the last time, Compaq and IBM used a non-Intel
      processor? Right now, they are the only companies big enough
      to take the plunge and not worry about be left in the
      bottom of Intel's food chain. If they success, look
      for DELL, Gateway, etc. to follow.

      Co-op advertising $ reimbursements by Intel will not pay for losing market share and revenue growth.

      Your faith in Intel is amiable, however, your vision is lacking.

    • Mike Liu:

      Are you literate in English? I have never stated that I purchased Intel in the 1970s. I DID state that I bought some in Jan 96. That's NINETEEN NINETY SIX. You may have me confused with the gentleman, Ekurich. I do WISH that I'd bought in the 70s, but seeing that I was in school until the end of the 70s, I'll cut myself a break for: a)not realizing what a brilliant investment coup that would have been; and b) not having any money at the time anyway.

      Why am I in denial? Intel does have that market share, and they did decline significantly since August (which is a little bit more than a month). How can this happen? Gee, maybe because a lot of people sold their stock! The real question is: why?
      I don't know why. I think it's because the market, though reasonably rational in the long-term, is irrational in short-term. However, this isn't first time Intel has swooned. Bought on last big swoon, in late 1995 thru early 1996. That time, decline EXCEEDED 25%. Intel dead in the water then? Intel fell over 25% April - May 1994. Intel dead then? If so,guess Intel proves the doctrine of the Resurrection.

      So, what explains this volatility. At risk of drawing sneers of my grad school profs for "reification", it's because Intel's stock is... (drum roll, please) VOLATILE!!!

      Always has been! (In case you don't understand that, "volatile" means unstable, readily changeable). Doesn't explain why Intel goes up and down so easily, but it is nonetheless the case.

      However, what isn't the case is that Intel has weak fundamentals. I'm looking at about 10 years worth of stats on Intel right now (adjusted for splits, and rounded):

      Yr Revenue EPS
      87 1.9B 0.17
      88 2.9B 0.31
      89 3.1B 0.26
      90 3.9B 0.40
      91 4.8B 0.49
      92 5.9B 0.62
      93 8.8B 1.30
      94 11.5B 1.31
      95 16.2B 2.02
      96 20.8B 2.90
      97 ~25B ~3.75 (estimated)
      98 ?? 3.50? (low estimates that I've seen or heard)

      Looks like a pattern, to me. Surges in revenues and earnings followed by short rests. Even up thru this year. So, for me to state that I think that there is a good chance that Intel will do in the future something similar to what it has done in the past does not constitute "denial".

      So, IBM is coming out with a sub-$1000 PC ($999, to be precise). So what? I've been buying sub-$1000 Intel-based PCs for some months, now (as long as you play the trick that others play, and forget about the monitor)! Bought a 200MHz MMX, 32 MB RAM, 3GB (not a typo) hd, sound, speakers, 24X CD-ROM, 56KB modem, whole works, for UNDER $1,000 TODAY.

      Additionally, I read AMD is STILL having yield problems. Cyrix may come on strong, but they are still a baby company. At a run rate of less than $400M per year, they'd have to grow TEN-FOLD to get to 15% of Intel's size. And to REALLY compete, getting
      to, say, half the size of Intel, would require THIRTY-FOLD growth. Could happen. Tripled their size this year. But it's not a slam-dunk. Ask yourself this question, "Which is harder? To maintain my current market share, and grow 15% - 25% per year; or to triple in absolute size, and double my market share, for four years running." It is not "denial" to harbor doubts about the capacity of a company to accomplish the aforementioned goals.

      Now, I have a whole bunch of history, plus a whole bunch of facts to support my modest theory that Intel isn't quite ready for the dustbin of history. To support your theory, that Intel is dead, you have the old saying, "It's different this time."

      To some degree, that's always true. History never quite repeats itself. Always some new wrinkle. But, I suspect that one new wrinkle that is NOT included this time is the fall of Intel.

    • Shawnuff:

      Re-read the message. It belongs here because I used the reference to JFK as an analogy to the type of logic applied to Intel. And, although it is obviously a broad generalization, and therefore, by definition, incorrect, I nonetheless think that it captures the flavor of many, if not most, JFK assasination theoriest.

      You did answer one question for me. I figured that the JFK comment would yank someone's chain. I was interested in finding out how long it would take. Not long, huh?

    • Dfrusso,

      I apologize. When I posted $3.50 for 4Q/1997 I meant for YE/97.
      I suspect there's a bug with Yahoo's message board.
      The exact text of the subject posted was:
      EPS $3.50 for 4Q/1997...for some reason the "$3" was
      dropped or truncated.

      You're right Paine Webber's 1998 EPS is also $3.50 strange.
      Thanks for pointing this out. I guess it means they expect
      Intel's EPS to stay flat from 1997 to 1998.

      I found the text for the earnings downgrades from Silicon
      Investor Intel thread...posted yesterday.
      The poster did not provide a link just the text.

      I don't have an account with these brokerage house, so I would
      have a hard time getting the details. If you or anyone else
      does, they are more than welcome to post their findings here.

      Anyways, as you can see for his posting, the EPS various
      a great degree depending on with analyst you choose to believe.

      • 1 Reply to true8
      • True8:

        I understand. Computers are always conspring to make us lookk like idioots.

        So PW REALLY thinks 1997 Q4 EPS of 60 cents? Makes me wanna open an account just to see how they get from here to there.... and back again. 1998 EPS $3.50 I understand. Disagree, but understand. 1997 EPS $3.50 boggles my mind. Oh well. If it's true, hold on tight! Gonna be one WILD ride!

 
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