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Intel Tanks; Blames Television in Part

Otellini calls CNBC's coverage possibly "self-fulfilling"

Intel's Q4 results, as good as they were, failed to impress a panicky "the sky is falling" stock market and Intel's light Q1 forecast, which the company called "a little bit cautious" on the US economy, sent the stock and the market down Wednesday, erasing billions in stockholder wealth in another utterly abominable day on Wall Street, a pattern that continued Thursday.

The market wanted Intel to return 40 cents on revenues of $10.8 billion in Q4. It came in with 38 cents on $10.7 billion, an execution Intel figures was "very strong" with nearly all products and geographies, particularly Europe, growing.

The company's telltale margin that everyone has been watching was up 6.9 points year-over-year to 58.1%, approaching the 60% that investors say they want.

This quarter Intel is predicting a gross margin of plus or minus 56% and 10% below-seasonal revenues of $9.4 billion to $10 billion. Wall Street expected $10 billion.

During the conference call Intel CEO Paul Otellini said that neither Intel nor its customers saw any significant slowdown "on the horizon" but that Intel's Q1 forecast was cautious because anything else would be "imprudent" given the recession bearishness CNBC has been spewing.

He called CNBC's coverage possibly "self-fulfilling" and any problem possibly limited to US capital markets, reminding folks that 70% of Intel's business comes from offshore.

Despite the Doomsday scenario others are painting, Otellini said he was "optimistic about 2008."

For all of 2008 Intel figures it'll have a gross margin of around 57%.

Intel's Q4 earnings were up 51% thanks to the chips going into notebooks and its record revenues, which Intel had said would be between $10.5 billion and $11.1 billion, were up 10.5% but fell short of the midpoint between $10.5 billion and $11.1 billion by $88 million, apparently a factor of lower-than-expected NAND ASPs.

Intel said total microprocessor unit sales set a record in Q4 but ASPs were flat; chipset units set a record but total flash units were flat.

It lost 2.5 cents a share to higher-than-expected charges of $234 million from the delayed spin-off of its NOR memory operation into a joint venture, a victim of the credit crunch.

Intel figures it's entering 2008 with the "best combination of products, silicon technology and manufacturing leadership in our history." It said it would like more 45nm inventory.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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Intel News Desk 01/18/08 04:00:37 PM EST

Intel's Q4 results, as good as they were, failed to impress a panicky 'the sky is falling' stock market and Intel's light Q1 forecast, which the company called 'a little bit cautious' on the US economy, sent the stock and the market down Wednesday

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