Intel Q2 2014 financial result.

[Abwx]

Did I miss anything?

Yes, the financial community opinion is that despite good financial results Intel is a bear stock on the long term, this is shown by the value of their stock wich is stable over the years but if we account for inflation its actual value is decreasing slowly but surely.

Edit : Perhaps that Intel17, who is versed on the financial side of things, could give us his opinion about this, i m much interested since he surely did compile a lot of infos.

 

[ShintaiDK]

Yes, the financial community opinion is that despite good financial results Intel is a bear stock on the long term, this is shown by the value of their stock wich is stable over the years but if we account for inflation its actual value is decreasing slowly but surely.

Edit : Perhaps that Intel17, who is versed on the financial side of things, could give us his opinion about this, i m much interested since he surely did compile a lot of infos.

Lets see, not only does Intel pay dividends. Their stock also went up over 50% the last year.

52 week 21.89 - 34.74

 

[mrmt]

Intel is doomed in mobile. PC group has bounced back very nicely, and datacenter is doing great too.

Intel had all the chances of pulling the plug on mobile if they really thought that they were doomed. That the company decided to double down its bet and try harder to get its share on the mobile market must be taken into account. The 1.1 billion number you are showing here and in other forums is nothing that Intel cannot afford, and by no means it reflects the health of the company balance sheet. I really don't see the fuss here.

 

[witeken]

This is the same discussion as last quarter. People were also quick to point out Intel 1B loss in mobile, ignoring their overall good quarter.

 

[Abwx]

Lets see, not only does Intel pay dividends. Their stock also went up over 50% the last year.

52 week 21.89 - 34.74

Of course the dividends are surely substancial but i was talking of long term.

It seems to me that despite huge profits for years Intel s revenue is now a fraction of Apple, LG or Samsung, all firms that were quite smaller than Intel a decade earlier IIRC, and there s other tech firms that are rapidly growing in much more deadly markets competition wise than X86.

 

[NTMBK]

This is the same discussion as last quarter. People were also quick to point out Intel 1B loss in mobile, ignoring their overall good quarter.

Actually last quarter it was "only" $929mn lost on mobile. They did even worse this time!

 

[ShintaiDK]

Of course the dividends are surely substancial but i was talking of long term.

It seems to me that despite huge profits for years Intel s revenue is now a fraction of Apple, LG or Samsung, all firms that were quite smaller than Intel a decade earlier IIRC, and there s other tech firms that are rapidly growing in much more deadly markets competition wise than X86.

Its only a small minority of companies that can show what you expect. And LG Electronics isnt one of them. Their stock is still lower than it was 5 years ago. Same goes for their display division.

And your statement is still wrong. Even with inflation, Intels value is increasing.

 

[Idontcare]

Intel is doomed in mobile. PC group has bounced back very nicely, and datacenter is doing great too.

What makes them destined to be doomed in mobile? The fact they are losing money while making long-term investments to get into it?

Surely the alternative is even worse, to die while not trying at all. Like AMD.

At least Intel is putting in an effort to be relevant in this second decade of the 21st century.

If they fail then at least they will have failed whilst trying, same as Nvidia and Microsoft. IBM and HP shareholders could only hope for as much.

 

[Abwx]

Its only a small minority of companies that can show what you expect. And LG Electronics isnt one of them. Their stock is still lower than it was 5 years ago. Same goes for their display division.

And your statement is still wrong. Even with inflation, Intels value is increasing.

For LG it s quite possible that they issued more stocks, what count is the total capitalisation, that said intel is holding a quasi monopoly thanks to X86 being ubiquitous (that they maintained using dubious methods) but what will happen if they have some competition with a new ISA , the ARM one, being used for the same applications..?.

Will they just manage to sustain their profitability ratios.?

I doubt it will be the case but anyway we ll know in a half decade at most.

 

[raghu78]

What makes them destined to be doomed in mobile? The fact they are losing money while making long-term investments to get into it?

Surely the alternative is even worse, to die while not trying at all. Like AMD.

Oh you mean AMD is dying because they did not try mobile and fail like Nvidia did. Not everybody has a x86 monopoly cash machine to fund their mobile ambitions. btw Intel has not made a dent in smartphones (< 1% market share) . In tablets they are buying design wins with contra revenue.

AMD is focussing on diversifying their revenue stream - semi-custom, embedded, professional graphics, dense server and ultra low power clients. They are showing good progress in these areas. Next year with the 20nm Skybridge ARM A57 based tablet SKUs they will make a start in the Android tablet market. 2016 should bring the real turnaround - high performance K12 ARMv8 and x86-64 cores. Anyway the future will reveal who made the right bets.

 

[ShintaiDK]

For LG it s quite possible that they issued more stocks, what count is the total capitalisation, that said intel is holding a quasi monopoly thanks to X86 being ubiquitous (that they maintained using dubious methods) but what will happen if they have some competition with a new ISA , the ARM one, being used for the same applications..?.

Will they just manage to sustain their profitability ratios.?

I doubt it will be the case but anyway we ll know in a half decade at most.

LG Electronics have had a stagnant (Actually slightly dropping) revenue since 2008. And its smaller than Intel in all terms.

Oh right, the doom of x86 due to the precious ARM. Right now ARM is losing tablet space to x86 and it havent been able to move into x86 segments at all. So lets see how it goes, shall we?

 

[dahorns]

Of course the dividends are surely substancial but i was talking of long term.

It seems to me that despite huge profits for years Intel s revenue is now a fraction of Apple, LG or Samsung, all firms that were quite smaller than Intel a decade earlier IIRC, and there s other tech firms that are rapidly growing in much more deadly markets competition wise than X86.

These companies aren't really comparable to Intel. They all sell end product consumer goods. Hell, LG and Samsung are large diversified conglomerates that are in everything: ship buildings, construction, telecommunications, insurance (the list goes on). They are in many respects outgrowths of the South Korean government--heavily subsidized since the end of the Korean war.

 

[Idontcare]

Oh you mean AMD is dying because they did not try mobile and fail like Nvidia did. Not everybody has a x86 monopoly cash machine to fund their mobile ambitions. btw Intel has not made a dent in smartphones (< 1% market share) . In tablets they are buying design wins with contra revenue.

AMD is focussing on diversifying their revenue stream - semi-custom, embedded, professional graphics, dense server and ultra low power clients. They are showing good progress in these areas. Next year with the 20nm Skybridge ARM A57 based tablet SKUs they will make a start in the Android tablet market. 2016 should bring the real turnaround - high performance K12 ARMv8 and x86-64 cores. Anyway the future will reveal who made the right bets.

AMD's CEO, Dirk Meyer, lost his job because the BoD recognized his incompetence in having a strategic initiative in the mobile segment. It doesn't get more striking than that.

 

[raghu78]

AMD's CEO, Dirk Meyer, lost his job because the BoD recognized his incompetence in having a strategic initiative in the mobile segment. It doesn't get more striking than that.

Dirk Meyer lost the job because he just could not reverse the server market share slide which worsened after Bulldozer. He was the CEO when the Bulldozer debacle was being designed. Everybody knew Bulldozer was badly delayed and a disaster when it launched.

btw a simple question whats hurting AMD the most today - Is it the lack of a high performance x86 core which can compete with Intel's best or the lack of mobile products which even Intel is finding difficult to break into and Nvidia has quit after trying ?

 

[USER8000]

AMD's CEO, Dirk Meyer, lost his job because the BoD recognized his incompetence in having a strategic initiative in the mobile segment. It doesn't get more striking than that.

He is not the CEO now though. OTH,Rory Read's track record at both IBM and Lenovo in senior positions has been great(it was under his tenureship that Lenovo ended up being the success story it is today),and even though AMD is probably a tougher nut to crack,turnabouts can take years.

Anyway,what has AMD got to do with this thread,since they are like 1/10 the size of Intel alone in personnel number.

Isn't Intel's main issue that companies like Qualcomm and Apple are having no issue selling profitable chips in phones and tablets?? This is the main sticking point for Intel and Nvidia and to a lesser degree AMD(who cannot afford to lose hundreds of millions to billions of dollars each year in this segment).

Intel and AMD are incredibly lucky that none of the companies are bothered to bring out higher TDP ARM chips,in the laptop segment,since ARM based Windows is not that well developed. In the end it is Microsoft which is more Intel's saviour in the consumer market. If it were not,then I could foresee much bigger issues,for both AMD and Intel.

At least for the consumer,market outside hardware enthusiasts on forums,nobody really cares what instruction set their CPUs use. It never stopped X86 displacement of other instruction sets decades ago,and it won't stop it now being displaced by others. Most computers are disposable devices for people which do a limited range of jobs.

Even Intel's use of X86 was down to convenience if anything else and if Itanium had been successful they would have depreciated its significance themselves(you need to thank AMD funnily enough for reaffirming X86 again).

 

[roob]

Yes, the financial community opinion is that despite good financial results Intel is a bear stock on the long term, this is shown by the value of their stock wich is stable over the years but if we account for inflation its actual value is decreasing slowly but surely.

Up nearly 75% since end of 2012 and currently at a 10 year high. And the "financial community" has Intel with 40 or 50PTs.

Do you even know what a bear stock is? Hilarious.

 

[Homeles]

btw a simple question whats hurting AMD the most today - Is it the lack of a high performance x86 core which can compete with Intel's best or the lack of mobile products which even Intel is finding difficult to break into and Nvidia has quit after trying ?

Nvidia hasn't quit. You know that.

AMD probably wouldn't be around today if they hadn't won over the consoles, or at the very least, they wouldn't be far from it. There is huge opportunity in the embedded space -- in the server and PC space, not so much.

 

[mrmt]

AMD is focussing on diversifying their revenue stream - semi-custom, embedded, professional graphics, dense server and ultra low power clients. They are showing good progress in these areas. Next year with the 20nm Skybridge ARM A57 based tablet SKUs they will make a start in the Android tablet market. 2016 should bring the real turnaround - high performance K12 ARMv8 and x86-64 cores. Anyway the future will reveal who made the right bets.

The bulk of the MPU revenue in the next decade will come from mobile, wearables and other LP applications. If Intel fails to break into this market this decade they become largely irrelevant in the next, just like AMD, IBM, SUN, VIA Cyrix and others once did.

The kind of IP AMD is developing will allow the company to stay alive in the long run, but largely irrelevant for everyone outside of the low margin embedded market. They are already out of the server market and mainstream consumer market, it's only a matter of losing the bottom market and they'll have to make up with embedded. And good luck trying to scrap the bottom of the barrel on the ARM market.

 

[mrmt]

Nvidia hasn't quit. You know that.

I hope Nvidia will raise its efforts to become a software company.

 

[Arachnotronic]

The bulk of the MPU revenue in the next decade will come from mobile, wearables and other LP applications. If Intel fails to break into this market this decade they become largely irrelevant in the next, just like AMD, IBM, SUN, VIA Cyrix and others once did.

I can't argue with this logic.

 

[Arachnotronic]

Yes, the financial community opinion is that despite good financial results Intel is a bear stock on the long term, this is shown by the value of their stock wich is stable over the years but if we account for inflation its actual value is decreasing slowly but surely.

Edit : Perhaps that Intel17, who is versed on the financial side of things, could give us his opinion about this, i m much interested since he surely did compile a lot of infos.

Abwx,

I would say that Intel shares are dependent first and foremost on the health of the PC market, followed closely by the datacenter. For the last several years, the PC market has been in a state of uncertainty. The rise of tablets had/have people thinking that the "PC" is in a long-term secular decline, and obviously when you are a company with ~60% of your sales levered to this market, this doesn't bode well for your earnings/stock price/sentiment.

However, the stock is performing well as of late as there seem to be signs that the PC market is improving. It looks as though the strength right now is in business/enterprise with consumer remaining weak (which lends credence to the "tablets are stealing wallet share" argument), but there is hope that in the long-run the PC isn't dead and could even return to slow and steady long-term growth.

The main thing to realize though is that consumers' budgets are fairly fixed and it would be silly to deny that smartphones and tablets have taken up dollars that would have traditionally been used by consumers on PCs. The PC isn't going away and I do expect that the segment will eventually stabilize (particularly as products like Core M blur the lines between tablets/PCs), but it's probably not really all that attractive a growth engine.

Going forward, Intel will need to demonstrate that it can be a viable competitor to Qualcomm and MediaTek. So far, Intel's mobile results have been disappointing and the losses are huge, but those losses represent the R&D spend that will put out products over the coming years.

There's no guarantee that Intel will "win", but it is certainly putting in the R&D investment commensurate with what a leader in this space would invest, and it does have a few structural advantages (IP leverage from PC products, fabs). However, as it has yet to prove that it can really compete with Qualcomm in modems/integration/time to market, and it is not yet clear if the non-Samsung/non-Apple market is big enough to justify this investment, this is by no means a "slam dunk".

At today's prices, I would say Intel is more or less fairly valued relative to how 2014 is likely to play out. The stock should get another repricing -- either to the upside or to the downside -- when the company announces guidance for fiscal year 2015 at its Investor Meeting in November.

 

[witeken]

Intel17, what are you looking forward to as a milestone in Intel's mobile adventure? Is it sill Broxton in mid-2015?

 

[raghu78]

The bulk of the MPU revenue in the next decade will come from mobile, wearables and other LP applications. If Intel fails to break into this market this decade they become largely irrelevant in the next, just like AMD, IBM, SUN, VIA Cyrix and others once did.

The kind of IP AMD is developing will allow the company to stay alive in the long run, but largely irrelevant for everyone outside of the low margin embedded market. They are already out of the server market and mainstream consumer market, it's only a matter of losing the bottom market and they'll have to make up with embedded. And good luck trying to scrap the bottom of the barrel on the ARM market.

You can believe what you want to. AMD is not going to give up on the server market and mainstream consumer market. AMD will have its answer in 2016 and they are hedging their bets by preparing both K12 ARMv8 and x86-64. People have written off AMD in the past and they came back stronger. So don't be surprised.

 

[Homeles]

You can believe what you want to. AMD is not going to give up on the server market and mainstream consumer market. AMD will have its answer in 2016 and they are hedging their bets by preparing both K12 ARMv8 and x86-64. People have written off AMD in the past and they came back stronger. So don't be surprised.

It's amazing the wild conclusions people can draw from the mere mentioning of the names of upcoming products...

 

[mrmt]

You can believe what you want to. AMD is not going to give up on the server market and mainstream consumer market. AMD will have its answer in 2016 and they are hedging their bets by preparing both K12 ARMv8 and x86-64. People have written off AMD in the past and they came back stronger. So don't be surprised.

AMD isn't giving up these markets, consumers have been giving up AMD in droves, that's what is making AMD irrelevant: Nobody wants what they sell.

And people have written AMD off in the past, but this time is different. There won't be any judge that will allow them another free lunch on someone elses's patents, and there is no NextIO and no DEC for them to acquire people and IP. K12 ARM will be a fiasco for the mobile market because they don't have much of mobile IP to integrate on their SoC, and ARM server market... well, that's the big if. The K12 x86 will have a very small market scope to be remotely relevant. We're probably talking about two low cost chips tailored for the embedded market, which should read like not bleeding edge performance, not bleeding edge anything, but extremely affordable. Should be something based on the cat cores.