Chip-making process gives Intel an edge

Article Excerpt

INTEL CORP. $20 (Nasdaq symbol INTC; WSSF Rating: Above average) is the world’s largest supplier of computer chips, with roughly 80% of the market. That figure could rise in the next few months, as Apple Computer begins using Intel chips to power its new line of Macintosh computers. Intel’s profit in the three months ended December 31, 2005 rose 21.2%, to $0.40 a share (total $2.4 billion) from $0.33 a share ($2.1 billion) a year earlier. Sales grew 6.3%, to $10.2 billion from $9.6 billion. However, these figures fell short of earlier forecasts, mainly due to weaker demand for new computers over the Christmas shopping season. Shortages of certain parts also hindered Intel’s ability to keep up with demand, which let rival AMD improve its market share. The news cut Intel’s stock by 10%, and it now trades at 15.9 times its forecast 2006 profit of $1.26 a share. We feel that these are short-term setbacks, and that Intel will bounce back…

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