Intel provided us with an eye-catching number as it announced, late on Tuesday, “a Restructuring to Speed its Transition to a Company that Powers the Cloud and Billions of Smart, Connected Computing Devices…”
Up to 12,000 Intel people — 11 per cent of the workforce — will lose their jobs.
Trip Chowdhry’s Global Equities Research has extrapolated that news out to the wider old skool US tech world and come up with a rather larger layoff number: 369,000 over the next 12 months. Read more
Intel said hard disk drive shortages due to the flooding in Thailand would continue to hit its business in the first quarter after it reported lower fourth-quarter revenues than initially expected. The world’s leading chipmaker by sales had warned in December that revenues would be reduced to about $13.7bn, rather than its previous forecast of $14.7bn, as the worldwide PC supply chain reduced inventories and microprocessor purchases in the wake of halted production of hard drives, reports the FT. On Thursday, it reported fourth-quarter sales of $13.9bn, ahead of revised analyst estimates of $13.75bn, along with profits of 68 cents a share, beating Wall Street forecasts of 61 cents. The WSJ reports that Intel stated that the supply chain disruptions haven’t trickled down to consumers, with no decrease in available PCs to buy on store shelves.
Samsung Electronics is merging its homegrown Bada operating system into a platform backed by Intel, the US chipmaker, to bolster its weak software and reduce its dependence on Google’s Android, says the FT. The move by the world’s largest technology company by sales comes as South Korean groups have privately expressed concern about Google’s $12.5bn acquisition of Motorola Mobility last year, warning of a long-term threat if powerful software producers make their hardware effectively in-house. Samsung builds successful hardware but software is its Achilles heel as it relies on Google to run its premium smartphone models. Analysts have predicted Samsung will seek to both diversify its portfolio of operating systems and acquire outside technology.
Intel has warned its fourth-quarter revenues would miss forecasts because of a shortage of hard disk drives created by Thailand’s devastating recent floods, the FT says. The world’s largest chipmaker by sales said flooding around Thai hard disk drive factories had hit the supply of the components. This meant computer makers were reining in orders of other parts – anticipating cuts in production as they are unable to complete PCs.
… puts a rocket under your share price.
Apple will soon launch a new model of iPhone, the WSJ says, which will be thinner and lighter with a more powerful camera. Citing people familiar with the situation, the newspaper says Apple has ordered key components for the device and is aiming to launch by the end of September. The new phone will use Qualcomm chips rather than those made by Intel-owned Infineon, which appear in most versions of its current iPhone 4. Apple is said to be upping the ante against rival Samsung. Meanwhile Reuters reports that a security flaw has been revealed in Apple’s iOS operating system, which is used in iPhones, iPads and iPod Touch devices. The vulnerability could be exploited to gain remote access to the devices, security consultants said.
ARM Holdings was underperforming the market on Tuesday afternoon, as rumours of a tie-up between Apple and Intel did the rounds.
The story can be sourced to Citigroup analyst Glen Yueng, who reckons a foundry relationship might be formed between Apple and Intel. Read more
Intel has claimed the biggest breakthrough in microprocessor design in more than 50 years, raising the stakes significantly for rivals in the increasingly capital-intensive global chip industry, reports the FT. The world’s biggest chipmaker said on Wednesday that it would begin producing chips this year using a revolutionary 3D technology that has been nearly a decade in the making, and which it said would act as the foundation for generations of computing advances to come. Microchip transistors, the building blocks of electronics, have to date been produced in flat structures – akin to printing on a sheet of paper. Intel’s breakthrough involves producing more complex three dimensional transistors on chips.
Applied Materials, the US semiconductor equipment maker, plans to buy rival Varian Semiconductor in a $4.9bn cash deal, reports the FT. California-based Applied Materials said the deal would give it access to new technology for the fast-growing smartphone and solar equipment markets. The $63 a share purchase marks a 55% premium to Varian’s closing price of $40.55 on Tuesday. Shares in Varian, which this week reported a 79% annual leap in first-half revenues to $572.7m, surged 51% to $61.40 in pre-market trade on Wednesday, while Applied Materials rose 9 cents to $15.24. Meanwhile Intel, to which Applied Materials supplies manufacturing equipment, on Wednesday claimed the biggest breakthrough in microprocessor design in more than 50 years, potentially sharply raising the stakes for its rivals.
Earnings reports from Intel and IBM have revealed an unexpected rebound in business spending, indicating optimism about economic recovery, the FT reports. Intel reported revenues of $12.8bn, up 25 per cent on a year ago, while IBM’s revenues were up 8 per cent to $24.6bn, its highest in a decade. Businesses have pumped up their spending on servers and data hardware necessary for cloud and mobile computing, the WSJ says. Even Intel’s personal computing revenues posted a strong performance, defying analyst forecasts of competition from tablet computers. The upbeat earnings sent Asia stocks and commodities higher on Wednesday, Reuters reports.
The computing industry has benefited this year from an unexpected rebound in business spending on information technology in the developed world and continued rapid growth in the emerging markets, according to figures released by some of the industry’s leading names late on Tuesday, the FT writes. The earnings reports from Intel and IBM flew in the face of concerns that sagging consumer spending, flatter PC markets and disruption to supply chains from the disaster in Japan would dent a tech recovery.
The FTSE 100 has regained its composure after Tuesday’s wobble and leading the market higher is ARM Holdings.
Intel is launching its first chip designed for tablet computers in an attempt to wrest control of the fast-growing market from UK-based Arm, whose chip architecture is now behind the majority of smartphones and tablets, reports the FT. The world’s biggest chipmaker will on Tuesday announce the availability of “Oak Trail”, the first product released by its newly-formed “netbooks and tablets” group, at a conference in Beijing. Intel expects more than 35 devices to be using Oak Trail starting from May, including ones from Fujitsu and Lenovo.
Intel has boosted its dividend payments by the largest amount in five years and added $10bn to its stock buy-back plans, joining a growing list of maturing technology companies that have upped their cash distribution plans to try to revive flagging share prices. The return to big stock buy-backs by such companies marks a return to confidence following the financial crisis and recession, reports the FT. Most cut back sharply on repurchases in 2009 to conserve funds, only to see cash reserves build up quickly as the crisis proved short-lived. The Intel move lifted shares in the world’s largest chipmaker by nearly 2 per cent in early Monday trading in the US to $21.14, though they missed out on the broader Nasdaq rally of the past six months.
Perhaps Jim ‘Mad Money’ Cramer is right and chip designer Arm Holdings really is significantly undervalued.
In the wake of Intel’s forecast-busting earnings overnight, shares in the Cambridge-based company charged to their highest level in a decade on Friday: Read more
Intel shrugged off concerns that its core PC market is under pressure from tablets and smartphones, reporting strong fourth-quarter earnings and giving an upbeat forecast for this year, the FT says. The world’s biggest chipmaker reported fourth-quarter earnings ahead of Wall Street expectations, with profits of 59 cents a share on revenues of $11.46bn. Analysts expected 53 cents a share on sales of $11.36bn, according to a Bloomberg survey. The New York Times reports Intel sexpects the strong sales gains to continue through the first quarter, forecasting revenue of $11.1bn to $11.9bn.
Intel shrugged off concerns that its core PC market is under pressure from tablets and smartphones, reporting strong fourth-quarter earnings and giving an upbeat forecast for this year, reports the FT. The world’s biggest chipmaker reported fourth-quarter earnings ahead of Wall Street expectations, with profits of 59 cents a share on revenues of $11.46bn. Analysts expected 53 cents a share on sales of $11.36bn, according to a Bloomberg survey.
Arm Holdings is in the charge again on Tuesday morning:
Intel has won approval from the Federal Trade Commission for its proposed $7.68bn acquisition of McAfee, Reuters reports. The chipmaker said it would continue to cooperate with the European Commission’s review of the deal, following concern that McAfee could gain privileged access to security features on Intel’s microprocessor chips, as reported in the WSJ last week. The EU had previously levied a record fine of €1.06bn ($1.39bn) against Intel in 2009 for shutting out rival Advanced Micro Devices.
Intel reassured markets at the start of the earnings season with third-quarter results ahead of its reduced expectations and a forecast of “healthy worldwide demand” for products for the rest of the year, reports the FT. Amid fears of a double-dip recession, the world’s biggest chipmaker had warned at the end of August of weaker demand than expected for computers in mature markets, reducing its sales forecast from about $11.6bn to $11bn. The “back-to-school” season was disappointing for PC makers in the US. Price-cutting is reported to have led to a recovery in September, meaning the “last four weeks of the quarter were better than we first thought”, according to Paul Otellini, chief executive. This had made Intel more optimistic about the fourth quarter. Intel shares closed at $19.77 in extended trading in New York.
The FTSE All-World equity index rose 1.5 per cent to 209.3 on Wednesday, its best level since April, and gold has hit a new record and the dollar is falling, after traders got what they wanted from the minutes of the latest Federal Reserve meeting, the FT reports. The Fed’s notes said that a majority of members viewed their September discussion as an acknowledgment that looser policy would be needed “before long”: a strategy, known as QE2, that many investors reckon will support asset prices and, hopefully, reinvigorate the weak economic rebound. Also contributing to Wednesday’s upbeat mood were better than expected figures from Intel and CSX, which lifted industrials and tech groups globally. In Europe, Dutch chip equipment maker ASML also delivered strong Q3 earnings and a positive view of trading for the rest of the year. The S&P 500 on Wall Street was up 0.7 per cent to a fresh five-month high, though financial groups weighed as worries for bank mortgage losses grew in spite of JPMorgan’s strong results.
Driverless cars, wind turbines, lunar robots, genetic profiling and human-powered monorails. Few would immediately connect these fields of research with an internet search engine, the FT reports. Yet Google has put hundreds of millions of dollars behind companies working on these areas and many more as part of an ambitious long-range investment programme. Many technology companies have vast cash reserves that some shareholders would like to see put to greater use. IBM, Microsoft and Intel all invest substantial sums in early-stage start-ups and pioneering research, but Google – with more than $30bn in cash on its balance sheet – is prepared to push the boundaries further.
Bellwether US company Intel has posted third-quarter profits that ranked slightly above analyst forecasts, having warned in August that it might face weak consumer demand for personal computers, Reuters reports. Intel unveiled profits of 52 cents per share rather than the 50 cents per share that had been expected. Revenues of between $11bn and $11.8bn were forecast for the fourth quarter — edging just ahead of estimates of $11.3bn, according to Bloomberg. Intel, the world’s top microchip maker, also faces reduced demand for chips from customers who have already built up inventories, while investors also look to most tech consumer growth to come from the market for smartphones and devices like Apple’s iPad, in which Intel has little presence.
Oracle eased anxieties in the technology sector with forecast-beating first-quarter earnings as its software business grew strongly in all regions and its hardware arm grew faster than expected, the FT reports. Oracle’s earnings contrast with Intel’s profit warning three weeks ago, which foresaw a $500m shortfall in sales. Oracle’s reported software sales leapt 25 per cent to $1.3bn, beating analyst forecasts by some margin, Reuters reports. Blackberry maker Research in Motion also surprised the market with superior sales, according to Bloomberg.
Oracle rose 4% to $26.40 in extended trading in New York on Thursday after the US tech giant reported better than expected first-quarter earnings on the back of strong growth in its software business in all regions and its hardware arm, reports the FT. Intel, a key rival, sparked concerns three weeks ago by warning of a revenue shortfall of about $500m in 3Q sales on weaker demand for consumer computers. Oracle, by contrast, reported sales of $7.59bn, up an annual 50% and ahead of an analyst consensus of $7.32bn. Earnings of 42 cents a share were up 38% and beat the Wall Street forecast of 37 cents.
It seems somebody doesn’t believe Apple, Intel, Samsung or some other big company is going to launch a cash offer for the UK chip designer.
That somebody is actually several Arm executives and a handful of non-executive directors who have just declared the sale of around 725,000 shares. (Note that these disposals follow a flurry of selling at the start of August). Read more
Ho hum. Another day, another Hewlett-Packard bid…
The acquisitive US tech giant is nearing a deal to buy US security software maker ArcSight, fresh from its $2.35bn victory in a bidding war against Dell for data storage company 3Par, reports the FT. Read more
Intel on Monday bought its way into the smartphone business with the $1.4bn acquisition of Infineon’s wireless chip operations, reports the FT. As part of the deal, the world’s biggest chipmaker will gain its German rival’s baseband radio chips which feature in Apple’s iPhone. One analyst told DealBook that the price tag was “fair,” and that the deal “smart and well-timed” but predicted the equity market “will give Infineon only very brief credit for the disposal.”
Intel will buy Infineon’s wireless chip unit for $1.4bn, Reuters reports. The deal is Intel’s second large acquisition in a fortnight, following its $7.7bn offer for McAffee, and will enable the chipmaker to make a bigger play for the smartphone market. The Infineon unit makes the chips used inside Apple iPhones, the FT notes, while McAffee will provide security solutions for the mobile wireless market. All the same, Intel made its last round of cellphone acquisitions during the dotcom bubble, and had largely sold them off by 2006 after dragging on its earnings, the WSJ observes.