Intel chip industry problems; powered by PCs, iPhones

Intel chip industry problems; powered by PCs, iPhones https://www.eresviral.com/wp-content/uploads/2018/10/Problemas-de-la-industria-de-chips-de-Intel-alimentado-por-PCs-iPhones

Intel chip industry problems; powered by PCs, iPhones







(Reuters) - Intel Corp beat analysts' quarterly earnings and earnings estimates on Thursday, boosted by its high-margin data center business and strong demand for its PC chips, raising its shares to 6, 0 percent in extended operations, although those gains then evaporated due to concerns over US trade tensions with China. 











FILE PHOTO: The Intel logo is shown at E3, the world's largest video game industry convention in Los Angeles, California, June 12, 2018. REUTERS / Mike Blake / File Photo    





The 39 percent increase in the company's earnings and the forecast for the fourth quarter exceeded expectations should be a relief for investors after three days of grim news from other major chip makers that have affected the stock markets Worldwide.  

Amazon Inc and Alphabet Inc also reported disappointing earnings on Thursday, and sent technology stocks down in trading hours. 

Intel executives see no weakness in the short term due to commercial tensions or the Chinese economy, despite the fact that customers of large data centers such as Baidu Inc and the consumer PC factories are there. But the increase in Intel's share of extended trade dropped to less than 1 percent when interim CEO Bob Swan said business tensions could be a "headwind" in the long term next year. 

Texas Instruments Inc., STMicroelectronics NV and SK Hynix warned of slowing demand for the rest of the year.  

Intel broke the trend thanks to strong sales of PC chips, the second consecutive quarter in which the company benefited from the sector after years of stagnation in that business and the increase in sales of iPhone modem chips. 

Swan told Reuters that the strength of the PC chips came from the purchases of computers by commercial customers in developed economies, as well as from players who build high-end machines. Many companies are updating their PCs because Microsoft Corp has said it will terminate support for some earlier versions of Windows in early 2020. 

At first, Intel's results seemed to dispel concerns that a US-China trade dispute or a slowdown in the Chinese economy could drag the global chip business.  

"We will work with our Chinese national clients and our [PC manufacturers] "Adjust and adapt the supply chain to deal with restrictions," Swan told Reuters in an interview before conducting a conference call with analysts. But later in the call, Swan admitted that commercial tensions could be a "setback" for Intel in 2019, although the company has not specified how much sales could suffer. 

Another boost for Intel's sales this quarter was its modem business, which connects smartphones to wireless data networks, which rose 131 percent in the quarter. The gain was due to Intel completely replacing rival modem provider Qualcomm Inc in the latest models of Apple Inc.  

But Swan said modem sales are also pushing Intel's margins and helped the company reduce its fourth-quarter operating margin outlook to 34.5 percent. 

"That said, what modems and memory do for the company is allowing us to play in a much larger market," he said. 

Intel forecast revenues in the current quarter of $ 19 billion and adjusted earnings of $ 1.22 per share. According to Refinitiv data, analysts, on average, expected revenues of $ 18.40 billion and a gain of $ 1.09 per share. 

Intel has been increasingly addressing a booming data center market as PC revenues have flattened since 2011. 

Revenues from its data center business rose 25.9 percent to $ 6.14 billion in the quarter, while analysts expected revenue of $ 5.89 billion, according to data and finance analytics firm FactSet. 

Rival Advanced Micro Devices Inc., which has been gaining ground with its new EPYC server chips, reported better-than-expected quarterly earnings on Wednesday, but forecast lower-than-estimated revenues for the fourth quarter due to declining demand for its cryptocurrency mining graphics chips.     

Revenues in Intel's customer computing business, which supplies PC manufacturers and remains the largest contributor to sales, also increased 15.5 percent to $ 10.23 billion, surpassing FactSet estimates of $ 9.33 thousand. millions. 

Intel PC sales have shown a positive trend in recent quarters, driven by higher demand. Many companies have started the process of buying new PCs because Microsoft Corp has said it will end support for Windows 7 in early 2020. 

"There has been a very strong demand for both the consumer and the PC company, which helped, they also did an excellent job managing through some supply disruptions," said Elazar Advisors analyst Chaim Siegel. 

Intel posted a charge of $ 290 million as a result of Micron Technology Inc.'s decision to buy the Intel part of a memory manufacturing plant in Utah, where the two had partnered to build advanced memory chips, an analyst at movements Moorhead's Moorhead Insights & Strategy called "negotiation" tactics. "He hopes the two will find a way to work together. 

Intel's Swan told Reuters that Intel has retained its rights to the technology and intends to build its own factories to produce the chips. 

"Despite its announcement, we will still have access to the factory supply for the next 18 to 24 months, and that will give us time to explore the alternatives we have to produce the product," Swan said. 

In a conference call with investors, Swan said he expected capital expenditures on memory chips to be "slightly lower" in 2019 "despite the construction's self-sufficiency" after Micron's decision. 

Net income increased to $ 6.40 billion, or $ 1.38 per share, in the third quarter ended September 29 from $ 4.52 billion, or 94 cents per share, a year earlier.  

Excluding items, the company earned $ 1.40 per share. 

Net income increased 18.7 percent to $ 19.16 billion. 

On average, analysts expected adjusted earnings of $ 1.15 per share and revenues of $ 18.11 billion. 





Report of Sonam Rai in Bengaluru and Stephen Nellis in San Francisco; Additional reports from Akanksha Rana; edition of Anil D'Silva, Clive McKeef and Diane Craft





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