Intel profits down 57%

[stone_cold_Jimi]

http://www.theglobeandmail.com/servl.../Business/home

C2D is arriving like the cavalry, it seems. They'll need to get "C4Q" out asap too, probably, hence the Kentsfield ES presence. I wonder... if everything below X6800 might get another rev or stepping, just to get it to live up to expectations. A _lot_ rides on this kind of thing; P4 Prescott really hurt them in all areas, I reckon. Too hot for business, too hot for home - no wonder they have inventory.

[Ominous Gamer]

57% might sound bad, but Intel actually did better then what most Wall Street people predicted.

[stone_cold_Jimi]

57% is bad. But it's a cut in profits, not a loss.

Missed this thread, much about the same thing really -

http://www.xtremesystems.org/forums/...d.php?t=107736

[uOpt]

Yeah.

Come on. They still made a profit in a period where their CPUs were disliked by gamers and server people alike, their buddy Dell took a tumble and they start into a period where they have the better chips.

In fact, the upcoming price war with AMD actually means there is a bigger risk of no profit or losses next quarter now that they have the better chips

[Freez]

Well, their R&D money will soon return to them 10-fold once Conroe hits retail.

[Torphoto]

So they made 430,000,000 and not 1,000,000,000 . They also have deep pockets and can probably survive a loss for several quarters as well, this is just a cloudy day in their books

[Ominous Gamer]

So they made 430,000,000 and not 1,000,000,000 . They also have deep pockets and can probably survive a loss for several quarters as well, this is just a cloudy day in their books

Investment wise, its very cloudy. People don't like to wait on returns with their money.

[madpete]

Man their share price took a right kicking today, might be a good time to buy shares in Intel as their so low...$17.10

[friedchips]

hmmmmm. that sounds like it may be a good investment

[yaddam205]

Man their share price took a right kicking today, might be a good time to buy shares in Intel as their so low...$17.10

Hmm I see Intel + Woodcrest a go go.

[775911]

Whats their PE and yield, anyone have a link ?

[BlackPearl]

http://finance.yahoo.com/q?s=intc

[775911]

Thanks, that is quite surprising for such a large sucessfull company. Their PE is low at first glance, half the sector average
http://biz.yahoo.com/p/

Their yield is average and their results in recent years still good. They seem to be a victim of the dotcom crash still when they were never that closely associated anyway. Still, the market analysts seem to support a large rise in price.


Here is a better link - http://biz.yahoo.com/ic/830.html

Semiconductors Industry Profile

The chip industry has maintained steady growth in recent years as it recovers from the worst slump in its history. The industry enjoyed a banner year in 2000 (more than $200 billion in sales worldwide), but then the bottom dropped out in 2001 -- and stayed dropped out through 2002 and much of 2003. By just about any measure, the decline was the sharpest in the history of the industry: global semiconductor sales plummeted to less than $160 billion in 2001 and again in 2002. Weak sales for all kinds of electronics gear, from PCs to cell phones to networking equipment, meant soft demand for the chips that make them work. Particularly hard hit were makers of chips for communications equipment and of DRAMs (dynamic random-access memories) -- a key type of memory used in virtually all PCs and servers. Numbers were a little better for 2003 (industry revenue was about $180 billion), better yet for 2004 (about $220 billion), and up slightly in 2005 (almost $230 billion). But a variety of factors, from the economic to the geopolitical, have made the industry's near future hard to forecast

Even Intel knows that PCs won't fuel the chip industry forever, so it has made forays into other areas, especially communications. Outside of its stronghold in microprocessors, Intel has plenty of company from the other titans of the chip world: US rivals TI (a top maker of analog chips and digital signal processors) and Freescale (which spun off in mid-2004 from Motorola); Asian giants Toshiba, NEC, Renesas (formed from the chip operations of Hitachi and Mitsubishi), and Samsung Electronics (the world's top maker of memory chips); and European kingpins STMicroelectronics, Infineon, and Philips.

They'll rise if not double over 5 years imo, I just wish I had some money left over to back that bet

[perkam]

I've said it before I'll say it again. Conroe will not even BEGIN to make a difference in financials until second H2 2007 because:

1. The chips will not enter the same level of production as the other smithfield and presler chips until end of 2006.
2. OEMs, builders, dell will begin to make marketing and product changes with regards to conroe over the next six months. The motherboards and different conroe models won't be out until first half of 2007.
3. Unlike AMD, Intel has not committed to making its previous chips EOL (AMD has made almost all 939 chips EOL) which will mean gradually move over to Core 2 Duo as intel beings production of oem motherboards supporting core 2 duo and starts shipping them to resellers/oems etc.
4. Intel will be releasing lower end Presler models cheaper than conroe in late 2006 which will mean until Intel can offer further price cuts after sales have amassed, they will not be able to force the market to conroe.
5. Not all corporate servers will demand the upgrade from dempsey/paxville to woodcrest because Intel most likley advertised at the time of THEIR release that it was powerful enough to handle anything.
6. Even though Kentsfield will be superior to Deerhound, both will be advertised as quad core and the market will not see it as AMD is slipping behind.

Plus about a 100 other factors/reasons to consider.

Please, do me a favor, don't buy the stock yet. Wait till at least Q2 2007 Intel conference call to make a buying decision.

Perkam

[Ominous Gamer]

I've said it before I'll say it again. Conroe will not even BEGIN to make a difference in financials until second H2 2007 because:

1. The chips will not enter the same level of production as the other smithfield and presler chips until end of 2006.
2. OEMs, builders, dell will begin to make marketing and product changes with regards to conroe over the next six months. The motherboards and different conroe models won't be out until first half of 2007.
3. Unlike AMD, Intel has not committed to making its previous chips EOL (AMD has made almost all 939 chips EOL) which will mean gradually move over to Core 2 Duo as intel beings production of oem motherboards supporting core 2 duo and starts shipping them to resellers/oems etc.
4. Intel will be releasing lower end Presler models cheaper than conroe in late 2006 which will mean until Intel can offer further price cuts after sales have amassed, they will not be able to force the market to conroe.
5. Not all corporate servers will demand the upgrade from dempsey/paxville to woodcrest because Intel most likley advertised at the time of THEIR release that it was powerful enough to handle anything.
6. Even though Kentsfield will be superior to Deerhound, both will be advertised as quad core and the market will not see it as AMD is slipping behind.

Plus about a 100 other factors/reasons to consider.

Please, do me a favor, don't buy the stock yet. Wait till at least Q2 2007 Intel conference call to make a buying decision.

Perkam

You calling this like you called the Ultra PSU warning?

[Otaking71]

Hehe..I picked up a bunch of shares today at 17.13...not bad.

[perkam]

You calling this like you called the Ultra PSU warning?

The Ultra PSU Warning probably saved a lot of people a lot of confusion. I became mod of General Hardware after that just to ensure that the right recommendations are made.

With relation to this, I started muliple threads on Intel's stock when it was $16 in Speak freely a month ago with lenghty discussions with members who have investing knowledge and experience.

http://www.xtremesystems.org/forums/...ighlight=intel

Careful where you go with that cynicism. Don't take my leniency when it comes to warnings and bans for granted.

Perkam

[Reznik Akime]

Perkam knows his stuff about stocks. He helped me learn quite a bit. Now I just need to actually stop being a packrat and spend some money on stockage.

[775911]

I'd buy the stock now just dont expect it to rise anytime soon, nice if it does but just because we see things happening on the ground now it'll not show in the figures for a year or longer and then a rise is still not guaranteed.

Unfortunately its not a simple case of, company does well and shares do well. The market just revolves around waves of greed and cash harvesting, they might hate intel for the next 10 years after being stung by its fall from 80.

Always invest for 5 years minimum especially if its not play money, I would not wait if I had a choice. I hope I can still buy this stock at this price in a years time of course

[davefr]

Paul Otellini is to Intel like Jack Welch was to GE. He has the right blend of strategist (like Grove), technologist (like Barrett) and pragmatist (like no other Intel CEO). Under Paul's watch he's:

1. Turned around the core CPU business. Tulsa, Montecito, Conroe, Merom, and Woodcrest are all ahead of schedule.
2. Won the Apple business
3. Transformed Intel into a platform supplier.

Paul is also restructuring Intel but he's doing it the smart way. Instead of widespread/across the board layoffs, he's dissecting the company and making systemic changes to prepare Intel for the next decade of which emerging markets will be the battelfield. He's also tapped in on the core aspect of the Intel culture that does best - when faced with a mega challenge.

The worst is behind Intel. Q2 is always the worst quarter That's over with and Intel is the best positioned it's ever been. Intel has multiple 300mm/65nm factories in full swing and they'll likely be at 45nm before AMD is at 65nm.

However there are some major challenges. Will the global economic climate collapse? If Intel get's back in the glory days will it fall back into complacency?

[zabomb4163]

a lot of analyst worry that computer processors are becoming a commodity. At what point will consumers stop caring about performance.

[perkam]

Paul Otellini is to Intel like Jack Welch was to GE. He has the right blend of strategist (like Grove), technologist (like Barrett) and pragmatist (like no other Intel CEO). Under Paul's watch he's:

1. Turned around the core CPU business. Tulsa, Montecito, Conroe, Merom, and Woodcrest are all ahead of schedule.
2. Won the Apple business
3. Transformed Intel into a platform supplier.

Paul is also restructuring Intel but he's doing it the smart way. Instead of widespread/across the board layoffs, he's dissecting the company and making systemic changes to prepare Intel for the next decade of which emerging markets will be the battelfield. He's also tapped in on the core aspect of the Intel culture that does best - when faced with a mega challenge.

The worst is behind Intel. Q2 is always the worst quarter That's over with and Intel is the best positioned it's ever been. Intel has multiple 300mm/65nm factories in full swing and they'll likely be at 45nm before AMD is at 65nm.

However there are some major challenges. Will the global economic climate collapse? If Intel get's back in the glory days will it fall back into complacency?

Take a look at the transcript of the AMD Conference Call. AMD battled Intel successfully while still being on 90nm, not to mention Penryn, the first 45nm chips, will be a dieshrink of Conroe, nothing more, just to fit more on one die.

AMD has demonstrated that it can battle intel while being a process behind and the market will take that into consideration. You make a valid point in that if overall chip business was to go into a rough patch, that could hurt Intel pretty bad as conroe is the it needs to get back the trust of the consumer, the oems and the corporations, while thwarting AMD's plans of presenting a valid alternative to its products.

The other point of disagreement lies in demand. Intel can produce millions more units every month than AMD, but if the market begins to see an abnormal rise in inventories AGAIN, they're not going to be the least bit forgiving.

Perkam

[davefr]

Take a look at the transcript of the AMD Conference Call. AMD battled Intel successfully while still being on 90nm, not to mention Penryn, the first 45nm chips, will be a dieshrink of Conroe, nothing more, just to fit more on one die.


Perkam

Yes they batted Intel in Q2 while on 90nm but I wouldn't call it a success at only $89M net income vs Intel's $1B+.

However the real battle is beginning now. I think it's going to get much tougher for AMD and much better for Intel going into 2H'06/1H'07.

However I agree that worldwide demand and the magnitude of this years seasonal uplift will be major factors.

[Verisimilitude]

However the real battle is beginning now. I think it's going to get much tougher for AMD and much better for Intel going into 2H'06/1H'07.

However I agree that worldwide demand and the magnitude of this years seasonal uplift will be major factors.

The real battle is in developing markets, I'd venture out a guess and say that is another reason for the price cuts on the current stock piles of P4's etc.

Although performance crown takes ~6months to see a market advantage, Intel's major share of the DELL and HP markets will help them regain what they have lost in the workstation market. (I'm working on a new HP 3500+ workstation, I wouldn't believe they exist a year ago)

From all the reports out yesterday it is easy to see that the Semiconductor market as a whole is growing fast. Since the high-end (CPUs a la AMD and Intel) markets are already pretty well developed in the US, they will have to look to Europe and Asia for their biggest gains in the next few years. Which of course Intel has more weapons to do that with than AMD.

Either way, I'd rate both stocks at "Long term Value" at the moment, but it would be too great of a risk looking for a quick 3 month return.

[perkam]

Yes they batted Intel in Q2 while on 90nm but I wouldn't call it a success at only $89M net income vs Intel's $1B+.

However the real battle is beginning now. I think it's going to get much tougher for AMD and much better for Intel going into 2H'06/1H'07.

However I agree that worldwide demand and the magnitude of this years seasonal uplift will be major factors.

You cannot begin to understand the basis of investing if you continue to compare AMD's results in terms of the size of figures to Intel.

Success is always measured relatively. Net income with respect to sales, net income with respect to operating income. You compare companies based on ratios and percentages.

It is considered moronic in the investing world to base success on concepts of "big" and "small", assuming that just because a company has bigger figures its more profitable is something a 10th grade accounting student would consider sheer lack of knowledge.

I would love to agree with you that Intel is killing AMD, and you're probably right in some respects. I've had debates with knowledgeable members where for every point I've made saying AMD is operating better, they've come back to refute those points with numbers from expert analysis from the nasdaq, yahoo finance and many more sources.

Feel free to have an opinion, just don't use faulty knowledge to back it up.

Perkam