Goodbye Semiconduttori ? - gz
By: GZ on Mercoledì 16 Ottobre 2002 03:19
Ecco l'ottimo riassunto della conference call di Intel. Non buono.
Stanno spingendo i chips che producono su per i canali di distribuzione per fatturare e anche così non hanno raggiunto i numeri promessi.
Una buona notizia per Intel dall'Italia invece: chi scrive ha appena preso una macchina con l'ultimi pentium IV 2400 per il server del sito (non ancora installato) e ne è rimasto così entusiasta che ne compra altri. Questo potrebbe sostenere la domanda nel medio periodo.
Jay Somaney analyzes the Intel earnings call. He is a partner and fund manager with TSG Capital Partners, a hedge fund based in Beverly Hills, Calif., and Plano, Texas.
10/15/02 02:28 PM EDT
Big Daddy Intel (INTC:Nasdaq) is going to report numbers after the close of regular market trading this afternoon. Analysts are expecting the company to report earnings of 13 cents per share on $6.57 billion in revenues. For the December quarter analysts are expecting earnings of 16 cents per share on revenues of $6.9 billion, and for 2003, 73 cents per share in earnings on $28.5 billion in revenues.
Intel today announced two new chips targeted at the cell-phone market, which is still seeing good amount of growth. Intel will compete with Texas Instruments (TXN:NYSE), the current leader in the cell-phone chip market. The issues in the back of my mind are whether Intel can maintain guidance going forward, which I think it will, knowing Andy Bryant's penchant for whistling past the graveyard.
Another issue will be margins. Can the company make its numbers without lowering prices and affecting gross margins? Not sure about that one.
Given the current economic environment, I would say that Intel will see some margin erosion. The third issue is whether the company will have to continue lowering overhead to meet its earnings forecasts. I would think yes on that as well. One caveat is whether all of the bad news has already been telegraphed in the stock. We shall find out soon enough. Stay tuned. This one will be very interesting.
Call is wrapped up. All in all, a weak quarter, and my feeling is that the December quarter is not going to be a good one either. The company is trying to put on a brave face here, but this time no one is buying the spin. It is indeed amazing that the sell-siders didn't even ask for details on the Intergraph lawsuit which Intel lost and which has far-reaching implications for the long-term success of INTC.
Over and out from Plano, Texas, where Rhea and I had a blast at the Texas State Fair last night.
Q: How is the notebook segment doing?
A: Better than expected. (Don't be so detailed, Andy Boy.)
Q: Can you provide linearity in the server market?
A: The first couple of quarters, servers did just fine, but we are still wondering what went wrong in the third quarter in the server market. All the server vendors are seeing rough going right now. (I will tell you what happened, Andy. The IT spending environment got a lot worse than you were claiming it was a couple of months ago.)
Q: Where was the weakest point geographically for Celeron?
A: There were no Celeron-specific issues but more of an issue of us capturing additional market share.
Q: How confident are you about fourth-quarter guidance?
A: The fourth quarter is less back-end-loaded, and consequently we are confident of the range we have provided.
Q: Can you provide more detail on your tax rate?
A: We lowered our tax rate a bit going forward. (All righty, then. Ask a stupid question, get a stupid answer.)
Q: How are the marketing efforts going?
A: We are increasing our advertising budgets, especially in mature markets.
Q: Can you provide us more detail on the equipment reuse?
A: First we took down our capex forecast by $500 million. Secondly, we are reusing some equipment from two years ago instead of buying new equipment
Q: Can you provide more granularity on ASPs?
A: Overall ASPs were down, but in desktop segment ASPs were actually up.
Q: If demand does not come back in the near term, what can you do to further reduce expenses?
A: As our international business continues to grow, seasonal issues gradually lessen, as certain markets will pick up slack in the other markets. As far as costs are concerned, we are focused on lowering our cost per unit using technological innovation. If business does not return quickly, we will also look at ways to reduce our infrastructure. (Hmmm, sounds like the ax might fall at INTC.)
Can you provide us some information on when you expect demand to pick up?
A: The industry is in the worst of downturns at the moment, and it's hard to say when exactly things will pick up.
Q: What kind of slowdown in production (fab ramps) are we looking at for the December quarter?
A: Unit growth will be better than revenue growth in Q4:02 so there will not be too much production slowdown.
Commercial demand is flat. Latin America had a poor quarter due to demand issues and also the effects of currency translation. Asian markets were strong except for Japan, which had a weak quarter. Japanese sales were off 12% quarter to quarter. Intel is blaming the poor Japanese economy.
Desktop business was strong in all geographies, according to the company. Hmmm, that tells me that the boxmakers and the electronic retailers have a lot more inventory in the channels than we had expected.
OK, call just began. Andy Bryant saying that results were in line with previous forecasts. No, they were not, Andy.
The company states that gross margins were lower than expected at 49%. INTC's architecture business was $1.4 billion, up 6% on a sequential quarter basis. The company ended the quarter with 82,000 employees, lower than previous quarter by about 1,500 employees. Losses from investments were greater than expected as well.
The company purchased 6.6 million shares in the September quarter at a cost of a billion dollars. DSOs improved to 36 from 37 in the previous quarter. Cash and short-term investments ended the quarter at $9.6 billion.
Intel numbers just out. The company came in with terrible numbers. They reported earnings of 11 cents per share on revenue of $6.5 billion. Consensus was for 13 cents per share. They state that the industry is experiencing one of its worst downturns ever.
The numbers do not include a $106 million charge related to its online services business and a $112 million charge to write off intangibles. The company is also lowering the range of revenue guidance for the December quarter. It expects revenue in the $6.5 billion to $6.9 billion range. Bank on the lower end or worse.
The company is also lowering gross margins for the year, as I had expected. INTC is also lowering capex to $4.7 billion, down from an earlier $5 billion to $5.2 billion. Not the signs the bulls were expecting. Stock giving back the day's gains.
Edited by - gz on 10/16/2002 1:30:37