INTC Flashcards
1
Q
Q3 2015 Earnings
A
- Datacenter light of expectations - $4.16bn vs. $4.25bn expectations
- Client computing group beat strongly - $8.5bn vs. $8bn expectation
- Missed on all other segments – IoT, software and services, and all other
- Gross margins in-line at 63%
- 2 important things from earnings release
o Datacenter number was a little light but that can be a positive from here if they are bullish on the call
o Sequential guide only up 2% because Q3 was an earnings surprise (this is a positive from my opinion because it means the bar for Q4 is low – one of the fears was they would keep an unsustainably high bar out there for Q4 - Miss was blamed on servers chips instead of the datacenter
- Every detail about the quarter caused the stock to slip, strength came largely from ASPs (vs. units). Quality of units was weaker than expected – more PC/Notebook (channelfill) vs. datacenter spend because of weak enterprise
- Inventory came in slightly elevated still, with DIO only falling from 88 to 85 sequentially, while inventory on an overall basis went from $4.82bn to $4.96bn
- Higher capex outlook for next year – dropped this year’s capex by a couple hundred million because an upgrade to a product pushed out the purchase into CY16
- Datacenter group continued to experience headwinds related to macro uncertainty and enterprise weakness
o Lowered server growth expectations from +15% to low double digits to account for enterprise weakness vs. relative cloud strength
o Q4 potentially weak on cloud datacenter revenues because cloud customers tend not to do large purchases in Q4 - CCG – large growth from pricing in PCs (+9% q/q), enterprise PCs mixed up
- Undershipped demand in C3Q, and lower tablet ‘contra revenues’ (subsidies) are helping ASPs
