U.S. Bancorp Piper Jaffray Delivers Quarterly Earnings Preview on INTC; Kumar Sites Primary Positive Trend: Cost Declines Ahead of ASP Erosion

Business Wire, March 28, 2000

Business Editors

NOTE TO EDITORS: The following is an investment opinion issued

by U.S. Bancorp Piper Jaffray.

This news release repeats and replaces previous transmission on

3/27/00. The second paragraph contains the correct percentage

rate.

MENLO PARK, Calif.--(BUSINESS WIRE)--March 28, 2000

U.S. Bancorp Piper Jaffray Managing Director and Senior Computer Hardware and Semiconductor Analyst Ashok Kumar today provided an earnings preview for Strong Buy rated Intel Corporation (INTC--$139 1/16, #). Intel is the world's largest chip-maker and is also a leading manufacturer of computer, networking and communications products.

"Due to weak commercial demand, we expect units to be down modestly sequentially, but up over 20 percent year-over-year," said Kumar. "In our view, the positive surprise is on gross margins, which are expected to expand about 270 basis points sequentially to about 64 percent. Contrary to consensus opinion, we expect average-selling prices (ASPs) to continue to decline, but an improved cost structure should enable the company to exit the year at 66 percent gross margins."

"Reflective of this, we increased our 2000 earnings-per-share estimate to $3.15 from $2.70," said Kumar. "Our current first quarter earnings-per-share estimate of $0.75 is $0.07 above consensus."

"We continue to maintain that Intel is a core technology holding," said Kumar. "From a trading perspective we need to be cognizant of seasonal weakness in second quarter 2000 and that earnings upside should primarily from gross margin expansion and not an acceleration of top line growth," said Kumar.

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U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based U.S. Bancorp, provides a full range of investment products and services to businesses, institutions and individuals. The company's investment banking business has grown exponentially in the last several years by focusing on the needs of growth companies in the health care, technology, financial institutions, consumer and industrial growth sectors. U.S. Bancorp Piper Jaffray has a national reputation for its expertise in fundamental research and equity and debt financing. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, First American Asset Management, U.S. Bancorp Libra Investments and U.S. Bancorp Piper Jaffray. Securities products and services offered through U.S. Bancorp Piper Jaffray, Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.

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