Hard Drive Shortages Knock $1B USD Off Intel's Bottom Line
December 13, 2011 10:45 AM
comment(s) - last by
Intel will likely receive boost in opposite direction once shortage ceases and OEMs rebuild their inventories
Globally, personal computer sales and market demand continues to rise, posting their
fourth consecutive quarter of growth
. You'd think Intel Corp. (
), the world's largest maker of personal computer central processing units, would be celebrating. Instead its financial staff are reporting some unpleasant news.
yesterday that it was dropping its outlook for fourth-quarter revenue from $14.7B±$500M USD to $13.7B±$300M. GAAP and non-GAAP gross margins also dropped half a percentage point. The cuts were due to shrinking microprocessor sales.
It turns out that the
recent flooding which ravaged Vietnam
, producers of one quarter of the world's hard drives, is still sending shockwaves through the personal computing market. Hard drive shortages have hit the OEMs hard. As they can't build computers without hard drives, they've turned to pushing much of their backup inventories onto the market.
Meanwhile, the OEMs have cut their CPU orders from Intel to lower levels. Sales won't be restored until the hard drive supply picks up again and the OEMs begin to rebuild their inventories.
The good news is that Intel could enjoy a very strong H1 2012, the exepcted timeframe where the hard drive market will return to normalcy. OEMs will be trying to build up their stock, while meeting the growing demand at the same time, and that adds up to a lot of component purchases.
In that sense, this revenue drop looks be more of a deferment that a true loss of business. That said, it is still a painful one for Intel's investors. The company's stock fell 1 a quarter percent following the news, which aired lated yesterday.
This article is over a month old, voting and posting comments is disabled
Don't forget about the accounting tricks
12/13/2011 1:41:30 PM
I wouldn't blame all the downturn on the shortage. Some of it may be that Intel is taking some accounting losses while it has an excuse for them. The stock price is already down so why not take some extra losses on your balance sheet this month while everyone assumes you are going to be down this quarter due to a situation out of your control.
"I modded down, down, down, and the flames went higher." -- Sven Olsen
Thailand Floods Cause Storage Shortages
October 24, 2011, 7:30 AM
Analysts: Apple Now Has More Than 10 Percent of the U.S. PC Market
July 14, 2011, 1:52 PM
"Prepare to be Punished": Microsoft is Killing OneDrive With Cuts, Blames Users
November 3, 2015, 8:23 PM
Apple's New "Magic" Peripheral Line Packs High Tech, High Prices
October 13, 2015, 9:39 PM
Samsung Adds 2 TB 850 EVO, PRO SSDs for $800, $1000
July 7, 2015, 4:23 PM
Seagate Senior Researcher: Heat Can Kill Data on Stored SSDs
May 13, 2015, 2:49 PM
How to Recover Most Apps After Your NVIDIA Driver Crashes in Windows 10
March 30, 2015, 12:54 PM
Tinkerer Gets Old School Mac Plus Running on the Modern Web
March 24, 2015, 6:41 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information