Intel (INTC) Q4 2014 Earnings Discussion

[Daniel Nenni]

Thomson Reuters has consensus estimates of $0.66 in earnings per share and $14.70 billion in revenue. In the fourth quarter of the previous year, Intel posted $0.51 in earnings per share and $13.83 in revenue. Intel is expected to report a year-over-year increase for both earnings and revenue due to the holiday shopping spike.

My questions:

1. Intel Mobile (the big financial boat anchor) is now under the PC group so I'm wondering if the losses will even be mentioned?
2. Will Intel hit the 40M contra Revenue target with Bay Trail?
3. Some say the PC business will decline others say it will increase, I say increase.
4. Another rumor is that Intel is taking market share (what little that is left) from AMD?

It will be an interesting call for sure......

​

 

[Daniel Nenni]

And it most certainly was. Here is the transcript:

http://seekingalpha.com/article/282...sc1:efd73abe113f58e92dfece19cda868f3&uprof=66

 

[astilo]

In the mobile and communications group, we set a goal to ship 40 million tablets in 2014. This goal is intended to establish Intel architecture in the marketplace and scale the supply chain and the chart developers. I’m pleased to report that we shipped 46 million tablets, becoming one of the industries largest merchant silicon providers in tablets

I wouldn't be so pleased

 

[Daniel Nenni]

Intel shipped 46 million tablets? Or they shipped 46 million chips that will go into tablets? Or did they actually sell 46 million tablets? If Cherry Trail gets the next sockets for those 46 million tablets that will be impressive. If they have to give away the Cherry Trail SoCs again, not so much.

Of all the semiconductor conference calls I listen to Intel is certainly the "smoothest".

 

[hist78]

Of all the semiconductor conference calls I listen to Intel is certainly the "smoothest".

Do you mean those analysts in Intel's conference calls gave Intel management an easy pass? Or it's evening they all want to wrap up the conferece call quick then go home?

 

[Daniel Nenni]

Also Read:

Intel Q4 and 2014 Results

 

[EDAGuy]

I'm still trying to decode this:

Jim Covello (Analyst - Goldman Sachs):

Thanks so much for taking the question. First question, Stacy, I see the CapEx is shifting around a little bit. Anything significant there, or are you just able to find a little bit of the ability to save some money?

Stacy Smith (CFO):

Yes, I would term it as a fairly significant reduction in CapEx for 2014, and we brought down, we brought the CapEx for 2015 down to the bottom of the range. And it's a variety of things. When I look at the savings we had in 2014, about half of it was due to call it basic blocking and tackling.
We were able to negotiate some lower pricing, we had some non-capacity related projects that we were able to push out of the year, and we're always looking for those opportunities, and I think the manufacturing organization did a great job of finding them.



It is a Vince Lombardi term for going back to basics but why?

 

[Daniel Nenni]

I'm still trying to decode this:

Jim Covello (Analyst - Goldman Sachs):

Thanks so much for taking the question. First question, Stacy, I see the CapEx is shifting around a little bit. Anything significant there, or are you just able to find a little bit of the ability to save some money?

Stacy Smith (CFO):

Yes, I would term it as a fairly significant reduction in CapEx for 2014, and we brought down, we brought the CapEx for 2015 down to the bottom of the range. And it's a variety of things. When I look at the savings we had in 2014, about half of it was due to call it basic blocking and tackling.
We were able to negotiate some lower pricing, we had some non-capacity related projects that we were able to push out of the year, and we're always looking for those opportunities, and I think the manufacturing organization did a great job of finding them.

It is a Vince Lombardi term for going back to basics but why?

Stacey Smith is also the one who used the term "Contra Revenue" for paying companies to take their Bay Trail SoCs. He is a clever wordsmith!

 

[Arthur Hanson]

Intel should not be given a hard time, they have an excellent sense of humor are following a classic business strategy "Losing money on every unit, but making it up in volume"

 

[hist78]

Intel should not be given a hard time, they have an excellent sense of humor are following a classic business strategy "Losing money on every unit, but making it up in volume"

OMG, in addition to decode those Q&A from Intel's conference call, now I need to decode this business strategy: "Losing money on every unit, but making it up in volume".

 

[benb]

My impressions of the call:
- Intel core businesses thriving again
- Datacenter, IOT and process technology are Intel's future, not mobile (based on R&D allocations)
- Mobile is not a money making strategy, but a "keep X86 relevant" strategy
- Rockchip and Spreadtrum are to be the new token competition and second-sources for X86 that AMD used to be

 

[hist78]

From Intel's web:
Intel Corporation - Financials and Filings

SANTA CLARA, Calif., January 15, 2015 -- Intel Corporation today reported full-year revenue of $55.9 billion, operating income of $15.3 billion, net income of $11.7 billion and EPS of $2.31. The company generated approximately $20.4 billion in cash from operations, paid dividends of $4.4 billion, and used $10.8 billion to repurchase 332 million shares of stock.

Mobile and Communications Group revenue of $202 million, down 85 percent from 2013.
Mobile and Communications Group negative revenue of $6 million, consistent with expectations.

Although one can argue that 46 million mobile/tablet chips were sold in 2014 is a big achievement for Intel. But do we know the consequence behind such negative revenue and negative growth? Can we say the drop of cash reserve is partially caused by this? Does anyone know the amount of "Contra Revenue" for whole year 2014 and 4Q2014?