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Intel Warns Sales Fall Short As Consumer Weakens, Although It's Making A Shedload

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http://uk.reuters.com/article/idUKTRE67Q4J520100827

Intel Corp (INTC.O) warned third-quarter revenue could fall short of its own estimates by more than $1 billion (644.5 million pounds), reinforcing doubts about the strength of a technology sector recovery.

But shares in the industry bellwether, which dominates the market for PC microprocessors, gained a bit on Friday because investors had braced for bad news and were relieved the downward revision had not been worse.

Global stocks also rose after U.S. economic growth data topped estimates, as Federal Reserve Chairman Ben Bernanke said the central bank was ready to counter a softening recovery. A number of fellow tech heavyweights, including International Business Machines Corp (IBM.N), firmed.

Some analysts pointed to a silver lining: Intel said resilient corporate demand was helping prop up average prices even though consumer demand in mature markets was weaker than expected.

"Even though the news is bad, the bad news is already in the valuation. Obviously, business isn't going great there, but the stock is so cheap this doesn't matter," said Stephen Massocca, managing director at Wedbush Morgan.

Intel shares were up 0.7 percent at $18.30 on the Nasdaq in afternoon trade, after falling earlier in the day to $17.81, their lowest level since July 2009. Shares in the world's largest chip maker have slid 15 percent since the middle of July.

It now expects third-quarter revenue to be between $10.8 billion and $11.2 billion, down from a previous forecast of $11.2 billion to $12.0 billion and analysts' average expectation of $11.5 billion, according to Thomson Reuters I/B/E/S.

"People were relieved it was not worse," said Avian securities analyst Dunham Winoto.

Intel now sees gross margins in the period of 65 to 67 percent. It had previously forecast gross margins of 67 percent plus or minus a couple of points -- near a record high for the company.

"The big news is enterprise and server demand is holding up. And Intel still expects to grow (revenue) and gross margins also," said JMP Securities analyst Alex Gauna.

It's still making a shedload of money and it's got very high margins which it can cut.

What's Intel's leverage or is it cash rich?

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They have loads of cash I understand. Enough to be able to buy McAfee(!) for $8 billion last week.

http://www.bit-tech.net/news/bits/2010/08/20/intel-buys-mcafee/1

The main point that appears to be confusing analysts is the valuation: at a 62 percent premium of McAfee's last traded stock price, the value of the deal appears way overblown with TechMarketView analyst Anthony Miller telling PC Pro that the high valuation suggests that "Intel very much wanted [McAfee] and was prepared to pay full price to get it."

Should the merger result in hardware-accelerated security packages - whether for smartphones or otherwise - Intel could get a head start into a market in which other companies are already starting to show an interest. Back in 2009 graphics card manufacturer Nvidia revealed that it was working on a CUDA-based anti-virus that would harness the power of your GPU to provide full protection without burdening the CPU, while long-time McAfee rival Kaspersky holds a patent on "a hardware-based antivirus system that effectively combats rootkits."

Whether you agree with Intel's valuation of McAfee or not, one thing seems certain: anti-virus technology is set to make the move from software to hardware, and fast.

I heard that last week but wasn't around to read up about it. They certainly must have cash to burn to pay a 62% premium for it.

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http://www.ecommercetimes.com/story/64669.html?wlc=1282942684

09/30/08 3:59 PM PT

Intel's perceived cash position could be deceiving, though.

"The only thing I would argue is that a lot of Intel's cash position is in investments, so they tend to get whacked when the markets go down," Doug Freedman, an equity analyst with American Technology Research, told the E-Commerce Times. "I suspect it's a negative right now due to the turmoil on Wall Street."

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Odd acquisitions and the a few anti-trust irregularities aside, great company. Not too sure about the current CEO. In the past, they always had excellent engineers like Moore and Grove in charge, not marketeers.

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always liked AMD better.

gotta love underdogs..

Loved the Opteron. They've sold (spun-off?) their fabs during the last year or so though.

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Intel is no longer just a processor company, any more than Oracle is just a database, or Microsoft just Windows.

And what's happening now is that ARM is beating Intel in the fast-growing areas of the processor market.

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On one hand the Mcafee deal is good for them because Mcafee now make lots of hardeware firewall and AV devices that form part of complex architectures - in many respect it allows them to complete with the likes of Cisco.

Personally, I was shocked when I learnt of the deal and paused to wonder whether it might do more harm to Intel than good?

Intel was on my list of shares to buy around Spring 2009 - all have soared but I lacked the guts to dive in believing that a bigger crash was about to happen :(

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On one hand the Mcafee deal is good for them because Mcafee now make lots of hardeware firewall and AV devices that form part of complex architectures - in many respect it allows them to complete with the likes of Cisco.

Personally, I was shocked when I learnt of the deal and paused to wonder whether it might do more harm to Intel than good?

Intel was on my list of shares to buy around Spring 2009 - all have soared but I lacked the guts to dive in believing that a bigger crash was about to happen :(

As I just said, ARM was the one to buy. Having picked it up for a song, it's showing about a £10k gain in my portfolio. Intel by contrast has been on a long downward trend since a 2002 peak, according to google.

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As I just said, ARM was the one to buy. Having picked it up for a song, it's showing about a £10k gain in my portfolio. Intel by contrast has been on a long downward trend since a 2002 peak, according to google.

The ARM gain makes no sense to me personally. I don't know what they are being usedin these days, especially since Apple went over to Intel chips.

ARM were one of the huge dot.con gains and I often wonder if ARM is to Tech now what Gold is to, um, Gold?

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The ARM gain makes no sense to me personally. I don't know what they are being usedin these days, especially since Apple went over to Intel chips.

ARM were one of the huge dot.con gains and I often wonder if ARM is to Tech now what Gold is to, um, Gold?

ARM is strong in many markets, most famously mobile phones and other portable devices such as ipads and e-books. They have a huge builtin advantage over Intel in these markets, because the x86 architecture is far too power-hungry: noone wants to have to carry a half-ton battery just to be able to leave the charger at home. ARM may also be about to encroach on Intel's traditional core markets, with developments such as smooth stone and Microsoft.

The thing about the dot-com bubble is that both the rise and the crash failed to distinguish really good companies (like ARM and Autonomy) from the trash.

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ARM is strong in many markets, most famously mobile phones and other portable devices such as ipads and e-books. They have a huge builtin advantage over Intel in these markets, because the x86 architecture is far too power-hungry: noone wants to have to carry a half-ton battery just to be able to leave the charger at home. ARM may also be about to encroach on Intel's traditional core markets, with developments such as smooth stone and Microsoft.

The thing about the dot-com bubble is that both the rise and the crash failed to distinguish really good companies (like ARM and Autonomy) from the trash.

Don't want to get into a technical geek discussion... the point being that there is little reason for ARM to have the growth it has had in recent years IMPO. Look at the share price, it hardly got affected by the Octo 08 to March 09 lows... That is just odd ignoring all the geekdom.

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Don't want to get into a technical geek discussion... the point being that there is little reason for ARM to have the growth it has had in recent years IMPO.

Aside from the fact that ARM CPUs are used everywhere in the low-power, low-cost end of the market and are starting to progress to performance levels that can compete with netbooks and low-end laptops. I'm 90% sure we have at least three in the house and I wouldn't be surprised if it's actually 6-10.

The primary driver for x86 over the last 20 years has been Windows, and that's becoming increasingly irrelevant. Which potentially opens a big market for competing CPUs.

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The primary driver for x86 over the last 20 years has been Windows, and that's becoming increasingly irrelevant.

Windows is still the most popular , most compatible and overall best OS out there.I don't see windows fading away anytime soon.

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Windows is still the most popular , most compatible and overall best OS out there.I don't see windows fading away anytime soon.

I was agreeing with your first sentence until I got to 'overall best OS'. But popularity and compatibility mean little when the average user doesn't need anything other than free software these days; if you spend your computer time on web-browsing, email, Farmville and word-processing, then you'd be just as happy with Linux, and if you're a manufacturer trying to build a $100 computer then you're not going to be putting a $100 copy of Windows on it.

Ten years ago I had a dual-boot of Linux for web development and Windows for basically everything else. Now I have a dual-boot of Windows for video editing and games, and Linux for everything else. To me Windows is just a backwards compatibility kludge for software that won't run on Linux... and I've been surprised by how well many Windows games now run through Wine.

The market has changed dramatically over the last few years and Microsoft are now trailing rather than leading. If you have to run Windows software then you basically have to have an x86 CPU, but if you're running generic open source software it can run on just about any modern CPU.

Edited by MarkG

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A thread about stocks and the economy has been taken over by the fecking nerds!

How do you judge the future value of a tech company without discussing the tech?

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Pointer? I never heard any such rumour!

Um, I typed ARM in Google finance to look at their share price and on the right hand side was a news link to an article in the FT about it.

Look at their share price over 10 years - basically hung around the 80p mark and then suddenly shoots up in the past year and a bit.

Looks like a classic rise on take-over rumours to me personally but then I am no financial guru. This is not financial advice.

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  • 259 Brexit, House prices and Summer 2020

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