FOOL PLATE SPECIAL
An Investment Opinion by Randy Befumo

Intel Shakes Up Market

INTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> opened down $21 1/4 at $142 1/2 this morning after the Santa Clara, California-based semiconductor giant warned that Wall Street was expecting too much out of the company's second quarter. The company stated that weaker-than-expected demand, particularly in Europe, will cause revenue and earnings to come in below expectations. Personal computer-related companies were all affected by this surprising revelation, with everything from box-makers to software to networking companies reeling right after the market opened. At around lunchtime, Intel was down $12 to $151 3/4 on strong volume.

When Intel Corp. announced its first quarter earnings in April it was initially expecting revenues to be flat to up slightly from the first quarter. Now it is looking at revenues that will be down 5% to 10% sequentially, although still up 25% to 32% from last year. The company revised its guidance for gross margins and now sees margins down from the 64% record achieved in the first quarter. Intel anticipates gross margins will be 60%, plus or minus a few points throughout the rest of the year. The company also believes expenses will rise 7% to 9% in the quarter and interest income should hang tough at $170 million. With the tax rate remaining stable at 35.5%, this puts Intel's second quarter income somewhere between $1.54 and $1.97 earnings per share (EPS), compared to $1.02 per share last year.

Although certainly Intel's prior optimistic assumptions were unfortunate, turning away from the new information and focusing sharply on the context remains important for individual investors. Without the warning, Intel's quarter would actually have been a solid quarter with revenues up more than 25% and profits up more than 50%. While investors may be disappointed that Intel will not make its expectations, the results are hardly anemic growth. Unless investors believe the PC is going the way of the buggy whip, they might want to consider today and possibly next week a nice little shopping opportunity.

UPS

INTEGRATED LIVING COMMUNITIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ILCC)") else Response.Write("(Nasdaq: ILCC)") end if %> moved up $2 1/16 to $11 1/8 after the elder care company agreed to be acquired by a private limited partnership for $11.50 per share in cash.

CYRIX CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYRX)") else Response.Write("(Nasdaq: CYRX)") end if %> jumped $2 7/8 to $24 7/8 after announcing its Pentium II clone at half the price of Intel's chip.

DOWNS

Transaction printer manufacturer TRANSACT TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TACT)") else Response.Write("(Nasdaq: TACT)") end if %> fell $1 7/8 to $11 7/8 after announcing that 1997 revenues will be $4 million less than expected because of a customer push-out.

SEMTECH CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SMTC)") else Response.Write("(Nasdaq: SMTC)") end if %> lost $5/8 to $31 1/4 after Federal Filings yesterday reported that specialty metals, steel, and consumer products company ALLEGHENY TELEDYNE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALT)") else Response.Write("(NYSE: ALT)") end if %> cut its stake in the analog semiconductor company to 10.2%.

CDMA wireless products company QUALCOMM INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QCOM)") else Response.Write("(Nasdaq: QCOM)") end if %> lost $3 1/8 to $50 1/4 after the company spooked investors by announcing that it has reduced its temporary workforce by 600, although the move had been planned.

XILINX <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XLNX)") else Response.Write("(Nasdaq: XLNX)") end if %> lost $1 3/4 to $53 3/4 and ALTERA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALTR)") else Response.Write("(Nasdaq: ALTR)") end if %> fell $1 to $51 1/2 in reaction to the Intel news, although field programmable gate array semiconductors have less to do with PC demand than memory chips made by companies such as TEXAS INSTRUMENTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TXN)") else Response.Write("(NYSE: TXN)") end if %>, which lost $1 5/8 to $90 1/4 this morning. Other collateral damage included semiconductor test systems maker TERADYNE INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TER)") else Response.Write("(NYSE: TER)") end if %>, which slumped $1 5/8 to $40 3/4.

CONFERENCE CALLS

INTUIT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTU)") else Response.Write("(Nasdaq: INTU)") end if %>
(800) 839-4232 -- replay
(402) 220-4869 -- replay

CUC INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CU)") else Response.Write("(NYSE: CU)") end if %>
(regarding HFS deal)
Replay available for 24 hours
(800) 633-8284
(code: 2798293 for Part 1 and code: 2802466 for Part 2)

PETSMART <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PETM)") else Response.Write("(Nasdaq: PETM)") end if %>
(800) 696-1563 (code: 203061)
(303) 267-1037 (code: 203061) -- replay (International callers)

MFRI <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MFRI)") else Response.Write("(Nasdaq: MFRI)") end if %>
4:00 p.m. EDT
(800) 275-2442 -- live and replay available for 24 hours

NOVELL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NOVL)") else Response.Write("(Nasdaq: NOVL)") end if %>
Replay
(402) 220-1010

THIS WEEK'S CONFERENCE CALL SYNOPSES

HOME DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %> Q1 Call
URBAN OUTFITTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: URBN)") else Response.Write("(Nasdaq: URBN)") end if %> Q1 Call
DAYTON HUDSON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DH)") else Response.Write("(NYSE: DH)") end if %> Q1 Call
ROSS STORES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ROST)") else Response.Write("(Nasdaq: ROST)") end if %> Q1 Call
MITY-LITE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MITY)") else Response.Write("(Nasdaq: MITY)") end if %> Q4 Call

FOOL PORTFOLIO                  BORING PORTFOLIO

ATCT unch. at $3 15/16          ATLS down $5/8 at $27 1/2
AOL down $3/8 at $54 7/8        BGP down $1/2 at $21 1/8
CHV down $3/8 at $70 1/2        CSL down $1/4 at $30 1/4
COMS down $7/16 at $47 3/8      CSCO down $9/16 at $66 3/16
DJT down $1/8 at $9 5/8         GNT unch. at $35 1/8
GM down $1/2 at $56 1/4         ORCL down $1 1/8 at $46
IOM unch. at $17 1/2            OXHP up $1 7/8 at $67
KLAC down $5/8 at $47 3/8       PMSI down $1/4 at $11
LU down $3/4 at $62 3/4         TDW unch. at $42 1/8
MMM unch. at $92 5/8
T down $5/8 at $35 3/4

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Randy Befumo (TMF Templr), a Fool
Fool Plate Special

Dale Wettlaufer (TMF Ralegh), another Fool
Ups & Downs

Brian Bauer (TMF Hoops), and yet another Fool
Editing