On Thursday afternoon 5pm:
Stock dropped 15% in premarket.
I wanted to see what happened, as eps and revenue was beaten.
The premarket was directly affected by these analysts and this call.
There were the participants of the call:
Company Participants
Trey Campbell - Director, IR
Bob Swan - CEO
George Davis - CFO
**Participants:**
Vivek Arya - Bank of America
C.J. Muse - Evercore
John Pitzer - Credit Suisse
Ross Seymore - Deutsche Bank
Stacy Rasgon - Bernstein Research
Timothy Arcuri - UBS
Weston Twigg - KeyBanc Capital Markets
Srini Pajjuri - SMBC Nikko
Here is the call itself
https://static.seekingalpha.com/cdn/s3/transcripts_audio/4360453.mp3
BOB and George speak about positives
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See in the earnings call, the first thing that was mentioned is that intel is very soon releasing TIGER LAKE which according to this article is faster than AMD
They also mentioned datacentre On-Die Interconnect is available
https://www.intel.com/content/www/us/en/silicon-innovations/6-pillars/interconnect.html
https://www.intel.com/content/www/us/en/foundry/emib.html
This helps data move between different compute engines, memory, and I/O and ensure very high low latency. Something which linux struggles with and has to use numanodes to combat this.
AMD doesnt have this technology. This is very important since the Datacentre industry is worth 23 billion.
They mentioned the delay in 7nm because of yield degradation. But didn't really elaborate on that.
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Then they talked about:
- Increased revenue over spending
- investing 900 Million, on 160 Billion dollar mobility opportunity
########### cfo ###############
- record revenue up 20%
Datacentre revenue up 34% which is 52% of total revenue
Desktop sales up 9%
47% revenue up in cloud
The analysts didn't really buy it.
######## Q & A ############
1st Q - Vivek Arya - Bank of AmericaAsked about 7nm delay, whats the market implication of that and outsourcing.
- Rob kind of didnt really answer the question and beat around the bush.- George mentioned that they have big demand for 10nm so it won't affect the market too much. He mentioned that the focus is global economy because of coronavirus than 7nm.Didn't really answer the question well.
2nd Q - C.J. Muse - Evercore
Follow up question on 7nm delay, contigency
3rd Q - John Pitzer - Credit Suisse
Follow up question on 7nm delay, and the delay, and seen the issue before, how will avoid the same mistake.
Didnt really answer the question well, just mentioned that they have milestones and be more pragmatic
4th Q - Ross Seymore - Deutsche Bank asking if they can make 7nm the focus.
Mentioned that 10nm is a great product. beat about the bush.
5th Q - Stacy Rasgon - Bernstein Research
Asked about the margins of 7nm and 10nm
A: They are growing faster in 5g comms side and had a higher product demand for 10nm.
6th Q - .Timothy Arcuri - UBS
long term implication of outsourcing some of the process technology
7th Q - Weston Twigg - KeyBanc Capital MarketsDatacentre Revenue, decline in Datacentre revenue
Answers:The drop on DCG because of- peaked on cloud- peaked on govt- peaked on commsBeat about the bush about competition
8th Q - Srini Pajjuri - SMBC Nikko
Guidance on q4A: Expect to be lower.
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Basically this call didn't really leave a good impression on the analysts, I think the -15% is deserved because the CEO and CFO can't answer questions truthfully, beat about the bush.
The expectation for future quarters is low.
The only thing that can save Intel now, is change the CEO and CFO.
I expect the share price to drop to 40.
It really sucks because I hold Intel. Now I have to hold this stock for the next year and put in extra money to cover the stop losses and fees.
There might be a boost with tiger lake but thats about it.
Submitted July 27, 2020 at 07:25PM by automax https://ift.tt/3046JPA
