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Intel has strong Q2, revenues up 12%

Posted Jul 15th 2009 8:00AM by Tom Johansmeyer (RSS feed)
Filed under: Earnings reports, Good news, Intel (INTC), Technology

Intel (NASDAQ: INTC) had Q2 revenues of $8 billion, up 12% from Q1 and beating analyst expectations of $7.23 billion soundly. This was the best quarter-over-quarter growth rate for the world's largest chip manufacturer in more than 20 years -- and a good sign for the technology sector as a whole.

The company's profit of 18 cents a share was more than double the consensus of 8 cents, and the good news sent Intel's stock up 7% in after-hours trading.

This report didn't include a $1.45 billion fine that the European Commission imposed on the company back in May. This would have pushed Intel to a loss of $398 million (7 cents a share). But Intel is appealing the decision, which involved accusations of an abuse of market position. The company puts chips into 80% of computers.

Continue reading Intel has strong Q2, revenues up 12%

Intel sees unsold inventory piling up fast

Posted Jan 22nd 2009 2:30PM by Brian White (RSS feed)
Filed under: Products and services, Intel (INTC)

Not only is Microsoft Corp. (NASDAQ: MSFT) feeling the hurt of the slumping PC industry, the leading chipmaker is also weathering the effect. In fact, Intel Corp.'s (NASDAQ: INTC) chip inventory has become so high that it may have to build new factories out of that silicon instead of selling those chips to, well, anyone.

Businesses have cut back spending on new gear that includes Intel processors, and consumers have flocked to bargain-priced netbook PCs since late 2008. Although Intel chips power almost all of those new machines, the Atom processor inside almost every one of them is not really a high-margin product. Nor can those sales make up for the overall downward sales trend in desktop and laptop PCs, and corporate servers.

What is a chipmaker to do? It's sort of like the inventory glut the automotive industry is facing. Large global manufacturing outfits can't just stop manufacturing nearly as fast as consumer tastes and sales dictate. So, when the economy tanks and credit lines become tight, the consumer and business money spigot can turn off almost overnight.

Those factories can't, though. Intel's sale of a lower-priced, non-advanced chip for these $350 netbook PCs won't be able to help it sell all those other higher-margin and unwanted chips. At some point, fire sales of chips will occur, and then we'll really see laptop PC prices and small servers much cheaper than they are now. Will anyone buy them then? Who knows.

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Last updated: November 28, 2009: 12:54 AM

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