AMD had announced (twice) that they were going to miss earnings for Q1. Intel products have been getting good press, and the super-geeky seem to be thrilled with the performance of Core2 Duo and Quad chips. Even Intel motherboards have gained favor with the over clocking crowd. But as recently as a month ago, Computerworld was less than flattering about Paul and Intel's 2007 product lineup.
Earnings for Q1 were good. Income was $1.61 billion, 27 cents a share. Last year was 23 cents/share. The tax settlement I mentioned earlier was a big factor and netted Intel and extra 5 cents. Analysts were expecting 22 cents, so we were right in line with the expectations. Our sales were just below expectations, $8.85B vs. an expected $8.9B. There good news here is that profit is up, since we hit the income expectation with lower than expected sales. Gross margin is 50.1%. One analyst said:
It doesn't appear that Intel is waging a price war. Rather, AMD has been cutting its processor prices in an attempt to maintain its market share gains to no avail.
That's great to hear from an analyst, but keep in mind that Intel has some good price cuts happening next week (this is public info). We'll have to see if these impact Q2 earnings. Intel foretasted Q2 sales between $8.2-8.8B. Wall street is expecting the higher number. Some analysts are concerned about rising inventory, and that Intel will be stuck with too much product. My uneducated guess is that the upcoming price cuts will take care of any inventory issues.
The other news is that Intel hit the employee target of 92K about 3 months ahead of schedule. I'm guessing this was due to a combination of aggressive layoffs and higher than average attrition.
My short take: it was a good quarter that demonstrates demand and affinity for Intel products is much better than it has been in recent years. Intel is doing well while AMD continues to cut prices and lose revenue and market share. Things may change when AMD gets more competitive products to the market.