Intel reported Q1 2012 financial results on Tuesday, April 17.
Intel has encountered a tough struggle to transition, to "refresh" its product line. The Microsoft desktop days are waning, just as the IBM mainframe days did. Intel was king of the desktop processing architecture. The world is going mobile and Intel is scrambling to regain the leading edge. Look at the charts below, the story, and draw your own conclusions.
Non-GAAP Q1 earnings per share dipped, but beat expectations, as previewed. However, the $0.56 "beat" was a 5-quarter low. The problem is GAAP EPS fell to a 6-quarter low, revenues a 4-quarter low, and net income a 7-quarter low. This hardly inspires confidence, even though Q1 is typically weak in the annual cycle. In fact, every major metric dropped. Is the drop cyclical or more fundamental?
CEO Paul Otellini knows the score and promised better days ahead, "In the second quarter we’ll see the first Intel-based smartphones in the market, ship products based on 22nm tri-gate technology in high volume, and accelerate the ramp of our best server product ever, providing a tremendous foundation for growth in 2012 and beyond". That left CFO Stacy Smith to do the explaining, "Similar to the fourth quarter our business was negatively impacted by hard drive shortages and the resulting additional reduction of inventories across the supply chain".
I'm not excluding Intel from the future, their vast resources are aimed squarely ahead. They are at the cusp of their mobile market launch plus expect more penetration into data centers. Next Q2 guidance is $13.6 billion, plus or minus $500 million. That would be the second or third highest revenues on record and a rebound QoQ and YoY. So, according to Intel, the bottom is in.
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