TECH in AMERICA (TiA)

SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY

With PC sales slowing, Intel slightly misses revenues for second quarter

intel-iris
Intel matched  earnings expectations but reported slightly worse than expected revenues as PC  sales slowed down in the second quarter.

Intel’s earnings are watched closely as a bellwether for the computing  ecosystem. That ecosystem has been a mixed bag as PC sales drop in the face of  competition from smartphones and tablets.

Intel reported net income of 39 cents a share, or $2 billion, on revenue of  $12.8 billion. Analysts expected net income of 39 cents a share and revenues of  $12.9 billion for the second quarter.

Intel got a big shot in the arm during the quarter from Haswell,  the code-named next-generation processor (now known as fourth-generation Core)  that delivered double the graphics performance and 50 percent better battery life  than previous-generation laptop chips. Haswell is one of a series of chip  families coming this year that Intel hopes will revive the PC market and help it  make headway into mobile devices.

“In the second quarter, we delivered on our quarterly outlook and made  several key product announcements,” said Intel CEO Brian Krzanich, in a  statement. “In my first two months as CEO, I have listened to a wide variety of  views about Intel and our industry from customers, employees and my leadership  team and I am more confident than ever about our opportunity as a company.”

He added, “Looking ahead, the market will continue buying a wide range of  computing products,” he added. “Intel Atom and Core processors and increased SOC  integration will be Intel’s future. We will leave no computing opportunity  untapped. To embrace these opportunities, I’ve made it Intel’s highest priority  to create the best products for the fast growing ultra-mobile market  segment.”

Intel’s stock price is trading at $23.87 a share in after-hours sessions,  down 1.16 percent. It closed earlier in the day at $24.15 a share, down 10  cents.

Patrick Moorhead, analyst at Moor Insights & Strategy, said, “Intel’s Q2  was a repeat of the last few quarters.  PCs were down, data center revenue  was up, and there is a need to reduce capital expenditures.  I’m glad to  see they are sticking to their guns on 14-nanometer production (an advanced  manufacturing process) by the end of the year as this is their key competitive  mobile growth. “

Intel stock history

Intel stock history

In the previous quarter, Intel’s earnings per share were 40 cents on revenue  of $12.6 billion. That was below analyst expectations at the time. Intel said  that the second quarter got a boost from the strong acceptance for the  fourth-generation Core products, which were used in everything from laptops to  all-in-one computers.

Due in part to weak demand for Microsoft’s Windows 8 operating system, first quarter PC sales were a disaster in the first quarter. But you can’t write off Intel just yet. The company still spends a gargantuan $10.1 billion on research and development. But Intel said today it is shaving $1 billion off its capital spending plan this year, and it will spend $11 billion instead of $12 billion.

Intel said that Krzanich implemented one of the most significant management  reorganizations in a decade. PC Client Group revenue was up 1.4 percent in the  second quarter to $8.1 billion, compared to the first quarter. It was down 7.5  percent from a year ago. Data Center Group revenue was $2.7 billion, up 6.1  percent sequentially and flat from a year ago. Other Intel Architecture Group  revenue was $942 million, down 3.7 percent sequentially and down 15 percent from  a year ago.

Gross profit margin was 58 percent, up 2 percentage points sequentially and  down 5 percentage points from a year ago.

For the third quarter, Intel foresees revenue of $13.5 billion, plus or minus  $500 million. It sees profit margins growing to 61 percent, plus or minus a  couple of points. For the full year, Intel expects revenues to be flat, down  from its prior expectations of a low single-digit percentage increase. Gross  profit margin is expected to be 59 percent, down from the prior expectation of  60 percent. Capital spending

Intel is shifting to meet mobile device demand. It has created laptop chips  that dissipate as little as 7 watts, and its code-named Haswell processor coming  mid-year is expected to be even better at power consumption. At the Consumer Electronics  Show in Las Vegas, Intel said it was working with seven major vendors  of smartphones who have launched Intel-based smartphones in 25 countries. But  the revenue from those deals is a drop in the bucket compared to the revenues  Intel gets from the PC chip business.

Former CEO Paul Otellini, 62, retired early from his job (Intel’s mandatory  retirement age is 65), and he was replaced by Krzanich two months ago.

Intel earnings history

Intel earnings history

by Dean Takahashi, courtesy Venturebeat.com
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Information

This entry was posted on July 17, 2013 by in SOFTWARE and tagged , , , , , , , .

Top Posts & Pages

POSTS

Enter your email address to follow this blog and receive notifications of new posts by email.

TEAM TiA!

%d bloggers like this: