Despite this down, there were numerous ups. Amidst a war
of words with NVIDIA, Intel forged
ahead with its upcoming discrete graphics offerings, set to take on NVIDIA
and subsidiary ATI, owned by its chief microprocessor competitor, Advanced
Micro Devices (AMD). Intel also was pleased to see a strong
Centrino 2 launch with many partner products, after concerns stemming from
glitches and delays.
Intel now has even more
good news -- the company just announced a strong quarterly report.
With reports from competitor AMD, Google Inc, International Business Machines
Corp and Microsoft Corp all coming later this week, Intel set the bar
high. It reported a 25 percent rise in profit, thanks to healthy notebook
processor demand. It also beat expectations with its forecasted revenue.
The only disappointment in the report was in the gross margin, which fell
slightly below the middle of Intel's projected target range. This is
thought to be again fueled by the same thing that boosted profits -- strong
demand for cheap notebook computers.
Some are critical that despite the otherwise strong report the gross margin is
a sign of weakness for Intel. CRT Capital Group analyst Ashok Kumar stated,
"The concern on the Street was that demand may be falling off the cliff.
We've seen that in the handset market. So at least as Intel's results and
outlook goes, we're not seeing similar weakness in the PC market."
However, even Kumar couldn't deny that Intel did well over the quarter, despite
this troublesome indicator. He added, "The only mild disappointment
was in the gross margin line due to a higher mix of low-end notebooks, but
overall I think the result was a surprise on the positive side, given the macro
He argued, "I think right now investors are looking at technology as a
glass that's half-empty and not half-full, but relative to other sectors, the
negative earnings revisions in technology have been more mild. And if we
can navigate through seasonally weak summer months, we should get a seasonal
tail-wind for the technology sector."
Intel's Chief Executive Paul Otellini on a conference call with analysts
cheered the good news and added, "Demand for our leading-edge computing
products around the world continues to be strong, with revenue and unit
shipments towards the high end of the seasonal norm."
Chief Financial Officer Stacy Smith told Reuters said the strong demand will
continue in the second half of 2008, "The demand signals we're seeing are
Intel remains successful in the face of a key shift -- with notebooks finally
surpassing desktops in sales, a feat long predicted. This year notebook
sales for the year are expected to indeed pass desktops for the first
time. Intel seemingly confirmed this saying that for the first time in
excess of 50 percent of all the processors it shipped were mobile
processors. CFO Smith remarked, "It's a pretty important
Tough times may be ahead as Intel weathers the FTC storm and attempts to carve
out a spot in the discrete graphics market, but it seems in good shape to meet
the challenges that await.