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"Don't sing it... just Bring It" The Rock


Peace out, Minyans!


So, Intel's (INTC) super-good news last night wasn't enough to get us zooming, despite a good open, huh? [Note to self: remember to actually trade ideas like that]. When you pencil on through the report on the back of an envelope (or Excel or legal pad... whatever) the company tacked about 7-cents to the EPS estimate range. Much better than the penny or so I was expecting.

Which raises the question, "Why is Boo warming his muzzle on the dangling entrails he's clawed from Hoofy's gut? (in a figurative way, of course)" What's the deal on Intel (INTC) holding flat and the Nasdaq rolling over out of the gates?

Breaking Intel Down:

Intel's 7-cents

2-cents: "Lower Tax Rate"

1.5-cents: Higher revenue

1.5-cents: Higher margins

2-cents: equity investments

Source: Thomas Weisel Partners LLC

Putting that into some context, the tax rate just "is", it doesn't matter in determining Intel's future. Same thing for the investments.

So, consider the parts that Matter to the compnay (revenues and margins) and to the Street (how the guidance range was adjusted).

The prior guidance was:

8.6 - 9.2 Billion in Revs

56% margins, +/- 2%

New Guidance is:

9.1-9.3 Billion in Revs

57% margins, +/- 1%

After Texas Instruments (TXN) and the semi-conductor industry (SIA) upping their outlook prior to Intel, let's just say that the Street was assuming Intel was at the high-end of the prior outlooks on both revenues and margins. Remember, the prior range was provided by Intel. Analysts know that the company is sandbagging for later. Everyone knows that.

The expectation for gross margin dollars (just revenues * margins) going into the can be inferred to have been: 9.2B in Revenue multiplied by 58% margins, or 5.336B in gross margin (a crude number but one which is a decent proxy for "core operations").

The new high-end is 9.3B in Revenue times 58% margins, or 5.394B in gross margin. Take the 5.394B new high-end and subtract the real expectation going into the call, 5.336B and you get $58 million more, before any taxes, charges and the like.

$60,000,000 or so more in gross margin seems pretty good until you get to the 6.2B shares. Then it's .9-cents ("point nine cents") in pre-tax Surprise.



I really, really don't want to turn the column into Tuesday's with Morrie. Really. We just sort of drifted that way and now I'm getting an overwhelming amount of kind and supportive emails as well as some of concern. So I just want to set it all straight, thank you all and leave it be (after sharing one of the notes by way of explaining why I'd be so honored and grateful, etc.).

Straight: The wife and still-cookin' baby are great. The daughter remains perfect (I feign no objectivity). Minyan "Kneel" is still in first place on the un-official Name Macke's Boy contest with his entry of Superfly. The entry Due Date is early August.

My father is not doing well, nothing really changed there and enough said already.

Thank you! Seriously, folks. Words fail. Thanks to everyone who sent in an email of light. Very, very kind.


I was touched by your words about your father. Being of his generation and knowing him, even better than what he built at Target (TGT) must be fulfillment of the son he raised and inspired. In Yiddish it is called Naches.

Your father might take satisfaction in knowing that four million American households-that's one in 25- are now shopping at Target during a 24 hour period.

That's the current finding from our May National study. All the best.

Minyan George"

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