From Value Line (07-16-2004): Intel shares have fallen quite sharply in trading today following uninspiring news related to the chip behemoth’s second-quarter results. Although sales just north of $8 billion and share net of $0.27 were both roughly in line with expectations, the company’s outlook for the remainder of this year is not quite so favorable. More precisely, management now expects the gross margin to be 60% plus or minus a couple of percentage points, compared with prior guidance of 62%. This primarily reflects increased revenue of lower-margined products such as flash memory chips, chipsets, and motherboards. What’s more, a slight reduction in average selling prices of microprocessors and a slower-than-anticipated reduction in manufacturing costs per unit will also likely hinder profits. As a result of the recent news, we have lowered our 2004 share-net target, from $1.25 to $1.20. Intel shares remain ranked 3 (Average) for Timeliness.

Company Description: Intel Corporation is a leading manufacturer of integrated circuits. Markets served: primarily makers of personal computers; also communications, industrial automation, military, and other electronic equipment. Main products: microprocessors (notably, the Pentium series), microcontrollers, and memory chips. Also sells computer modules and boards, and network products. Foreign business: about 75% of ’03 sales. R&D: 14.5% of sales. ’03 depreciation rate: 12.0%. Has about 79,700 employees, 235,000 shareholders. Officers/directors own 3.4% of stock (3/04 proxy). Chairman: A.S. Grove. CEO: C.R. Barrett. Pres.: Paul Otellini. Incorp.: Delaware. Address: 2200 Mission College Blvd., Santa Clara, CA 95052-8119. Tel.: 408-765-8080. Web: www.intc.com.