[Intel] Intel Raises Third-Quarter Revenue Expectations

[Arachnotronic]

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Intel Corporation today announced that third-quarter revenue is expected to be above the company's previous outlook. The company now expects third-quarter revenue to be $15.6 billion, plus or minus $300 million, as compared to the previous range of $14.9 billion, plus or minus $500 million. The increase in revenue is primarily driven by replenishment of PC supply chain inventory. The company is also seeing some signs of improving PC demand.

http://www.intc.com/releasedetail.cfm?ReleaseID=989377&ReleasesType=Home

 

[ShintaiDK]

Seems the entire PC sector is on an uphill curve currently.

Specially the higher SKUs. People want quality.

 

[Arachnotronic]

Seems the entire PC sector is on an uphill run currently.

Also looks like Intel wisely made sure to keep the amount of processors it shipped to customers on the low side to avoid any inventory problems. Now they are reaping the benefits of being overly cautious. Good stuff.

Hope the market continues to be decent so that the company keeps investing in new and interesting PC products.

 

[VirtualLarry]

Seems the entire PC sector is on an uphill curve currently.

If that's true, then that's a good sign.

 

[Arachnotronic]

If that's true, then that's a good sign.

The PC market will have good years and bad years. Long term trend is still down, but the death of the tablet market and a much better Windows 10 should help ease the pressure on PCs.

 

[NTMBK]

Seems the entire PC sector is on an uphill curve currently.

Ever heard the term "dead cat bounce"?

 

[turtile]

Ever heard the term "dead cat bounce"?

Probably just a temporary thing for the PC side. My assumption is that businesses are just starting to feel confident about upgrading their computers and some consumers and business probably figured out that tablets can't fully replace PCs in many cases.

 

[witeken]

To clarify things up, this year Intel has been astoundingly conservative / pessimistic / cautious. They were predicting high single digits decline for the PC market, so it's not really all that much of a surprise that were able to beat this. So I wouldn't say the PC market is really going flat, but the decline hasn't been as dramatic as Intel had anticipated.

Also, while digging up on the comments about the PC market and Q3 expectations in Q2 earnings call, I came across this nice comment:

On the inventory side, as I talked to you last quarter, we ended Q1 higher than where I wanted to be. Our yields got better in Q1. Frankly, they got a lot better in Q2 as well.

Yay for mature 14nm node! Now obviously Intel wants to milk the crap out of this improved yield, so they bring Cannonlake down to 14nm. Should have been called Drunk Lake.

If they carry this yield improving momentum to 10nm and 7nm... will they reduce 10nm back to 2 years?

 

[nerp]

PCs aren't going away. The days of a huge percentage of American families buying a desktop from Dell every Christmas are over. But PC gaming is exploding, companies are finally beginning to upgrade aging fleets and the euphoria over Macbooks and ipads is over. More and more people are realizing they want a powerful beautiful windows laptop or a kick butt computer in their home office. Sick of spinning beachballs!

 

[VirtualLarry]

PCs aren't going away. The days of a huge percentage of American families buying a desktop from Dell every Christmas are over. But PC gaming is exploding, companies are finally beginning to upgrade aging fleets and the euphoria over Macbooks and ipads is over. More and more people are realizing they want a powerful beautiful windows laptop or a kick butt computer in their home office. Sick of spinning beachballs!

PCMR, represent, YO!

They need to make some "Life is better on a PC" commercials.

 

[witeken]

It seems INTC is finally gunning for $40. Last time they were this high... PC were ALSO doing better than expected (XP refresh). Even though Intel is becoming less and less PC dependent, their stock still has very good correlation with the PC market. Which is good considering data center is underperforming. You know, Intel could just as well have said they were forecasting a 10% CAGR, and everyone would have been fine, but the 15% seems unobtainable.

 

[Arachnotronic]

It seems INTC is finally gunning for $40. Last time they were this high... PC were ALSO doing better than expected (XP refresh). Even though Intel is becoming less and less PC dependent, their stock still has very good correlation with the PC market. Which is good considering data center is underperforming. You know, Intel could just as well have said they were forecasting a 10% CAGR, and everyone would have been fine, but the 15% seems unobtainable.

I'm not complaining, the payday from the rise over the last couple of days has been nice.

 

[witeken]

Still waiting for Ashraf's article on Fool.

 

[Borealis7]

It seems INTC is finally gunning for $40

great timing! 2 weeks after Feb-Aug SPP ended. announcement shot the stock up 3% on 9/16

 

[cytg111]

Probably just a temporary thing for the PC side. My assumption is that businesses are just starting to feel confident about upgrading their computers and some consumers and business probably figured out that tablets can't fully replace PCs in many cases.

- Tablet market saturated. Phone market saturated. Next big small thing is IoT which is still just a bit too outthere. Markets are settling in an equilibrium and thus some cashflow returns to the pc market. I can see that.

 

[jpiniero]

Probably just a temporary thing for the PC side. My assumption is that businesses are just starting to feel confident about upgrading their computers and some consumers and business probably figured out that tablets can't fully replace PCs in many cases.

If companies are going to upgrade to Windows 10, Q3/Q4 would be right about the time they would complete their testing and roll it out. So that could be it.

 

[VirtualLarry]

On the inventory side, as I talked to you last quarter, we ended Q1 higher than where I wanted to be. Our yields got better in Q1. Frankly, they got a lot better in Q2 as well.

So that explains why G3900 Celerons are now finally common and plentiful, at listed prices.

 

[witeken]

One thing that nobody seemed to bother to do is tell how this compares Y/Y.

The $5.6B would be a 7.5% increase Y/Y. At the start of the year, Intel guided

Expects mid-to-high single-digit 2016 revenue growth. Consensus is for 5.6% revenue growth.

Q1 was 8%, but then guided for mid-single digit growth. Q2 was 2.3%.

 

[Abwx]

- Tablet market saturated. Phone market saturated. Next big small thing is IoT which is still just a bit too outthere. Markets are settling in an equilibrium and thus some cashflow returns to the pc market. I can see that.

If we take 10 years as the durability of the last PC gens then the ones delivered in 2006 need an upgrade, since the market was growing at the time we should witness a 5-6 years recovery, moreover if we include some newcomers in PC usage, but after this period there could be an even more dramatic contraction compared to the past years..

Charts below explain it all :