Intels lower Q115 guidance

[mrmt]

http://newsroom.intel.com/community...12/intel-lowers-first-quarter-revenue-outlook


SANTA CLARA, Calif., March 12, 2015 -- Intel Corporation today announced that first-quarter revenue is expected to be below the company's previous outlook. The company now expects first-quarter revenue to be $12.8 billion, plus or minus $300 million, compared to the previous expectation of $13.7 billion, plus or minus $500 million.

The change in revenue outlook is a result of weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain. The company believes the changes to demand and inventory patterns are caused by lower than expected Windows XP* refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe.

The data center business is meeting expectations.

(...)

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Big bomb Intel dropped today, and this prompted them to review the guidance for the entire year. They will have a lot of explaining to do on the Q&A.

 

[Arachnotronic]

They will have a lot of explaining to do on the Q&A.

Agreed.

 

[mrmt]

Agreed.

I have a feeling that this is related to yet another 14nm screw up.

 

[fleshconsumed]

Stock is down >3%. Maybe if it keeps going down it gets to a reasonable range again

 

[Arachnotronic]

I have a feeling that this is related to yet another 14nm screw up.

I don't think so. It's a demand problem it seems.

 

[liahos1]

I have a feeling that this is related to yet another 14nm screw up.

i think there were data points ytd suggesting a slowdown among the taiwanese notebook odms. Also the euro has tanked against the dollar and that could be a headwind which they mention in their release.

 

[witeken]

Big bomb Intel dropped today

Don't worry, no one died. They're still a healthy company, which is what matters.

 

[frozentundra123456]

Well obviously the lower expectations is due to lower demand. The big question is why is the demand lower. Part of it is probably economic conditions, but I do believe it is also related to the delays in 14nm and the fact that so far it has not shown compelling improvements that would motivate sales/upgrades.

I also thought when this guidance came out, it was pretty optimistic.

 

[frozentundra123456]

Well obviously the lower expectations is due to lower demand. The big question is why is the demand lower. Part of it is probably economic conditions, but I do believe it is also related to the delays in 14nm and the fact that so far it has not shown compelling improvements that would motivate sales/upgrades.

I also thought when this guidance came out, it was pretty optimistic.

Edit: I am surprised with all the 14nm delays that the stock has performed as well as it has. This could drive a pretty serious correction I think.

 

[witeken]

FYI, revenue forecast is now flat compared to revenue a year ago.

 

[exar333]

FYI, revenue forecast is now flat compared to revenue a year ago.

Flat is probably pretty good considering the issues with 14nm. If the rest of the year's roadmap stays intact, the remainder of the year could be very good though.

 

[ShintaiDK]

The dollar cost cant be helpful either.

Example vs the euro:
http://finance.yahoo.com/echarts?s=EURUSD%3DX+Interactive#%7B%22range%22%3A%223mo%22%2C%22scale%22%3A%22linear%22%7D

10-15% less buying power for europeans contra dollar priced goods.

 

[Phynaz]

Ruh-Roh!

They've also cancelled all guidance except for the data center group.

 

[ArizonaSteve]

Maybe the business world is getting as bored with the 5-10% year on year performance increases as we are.

 

[mrmt]

Don't worry, no one died. They're still a healthy company, which is what matters.

It is still bad news.

 

[mrmt]

Maybe the business world is getting as bored with the 5-10% year on year performance increases as we are.

The PC ecosystem needs a healthy Microsoft, and as of now they are actively working to destroy their platform. The fact that windows XP is still being discussed today is a testament of how divorced Microsoft is from the market.

 

[witeken]

It is still bad news.

For investors. If anything, I hope this encourages Intel not to take the foot off Moore's Law's pedal.

 

[Arachnotronic]

For investors.

Intel's job is first and foremost to deliver value to its shareholders. If management fails at this, then that's bad news.

Extending that further, if the company isn't prosperous, Intel will cut costs, which means employees get laid off. I'm sure those hard working folks trying to feed their families would view poor financial performance as very bad news, indeed.

 

[Vesku]

I bet there are quite a few IT departments that have slowed purchases so they can do large upgrades on Windows 10 release. Upgrading their users from XP/Vista/7 to 10 rather then Windows 8.1 will probably save them quite a bit of tech support costs, i.e. "How do I....?" type user calls.

 

[mrmt]

I bet there are quite a few IT departments that have slowed purchases so they can do large upgrades on Windows 10 release. Upgrading their users from XP/Vista/7 to 10 rather then Windows 8.1 will probably save them quite a bit of tech support costs, i.e. "How do I....?" type user calls.

Calling the change to W8 or W10 an upgrade is comical.

 

[Vesku]

Calling the change to W8 or W10 an upgrade is comical.

At least for Windows XP and Vista business computers it's pretty much a necessity due to Microsoft's support windows. Windows 10 is looking pretty good on a costs basis with Microsoft addressing some concerns with 8 and somewhere around an extra 5-7 years of support, i.e. security updates, over Windows 7. If an IT department is looking at it from the perspective of large scale client PC and laptop replacement I would be surprised if there wasn't a bit of momentum for delaying for Windows 10.

 

[mrmt]

Well at least for Windows XP and Vista business computers it's pretty much a necessity due to Microsoft's support windows. Windows 10 is looking pretty good on a costs basis with Microsoft addressing some concerns with 8 and somewhere around an extra 5-7 years of support, i.e. security updates, over Windows 7. If an IT department is looking at it from the perspective of large scale replacement I would be surprised if there wasn't a bit of momentum for delaying for Windows 10.

Both W8 and W10 have metro, which *is* an issue for any IT department worth its salt.

 

[xthetenth]

Both W8 and W10 have metro, which *is* an issue for any IT department worth its salt.

How exactly?

 

[mrmt]

How exactly?

Metro breaks with all the previous UI conventions and Metro is also a very inefficient to use with a desktop/notebook PC. It's an IT support nightmare.

 

[Vesku]

Both W8 and W10 have metro, which *is* an issue for any IT department worth its salt.

Microsoft is ceding to several IT concerns with 10. Booting to desktop with keyboard and mouse present.

http://www.cnet.com/news/how-continuum-will-work-in-windows-10/

http://movietvtechgeeks.com/windows-10-worth-upgrading-this-time/