Intel Cuts 2012 Outlook

Tyler Durden's picture


INTC missed the Q2 topline ($13.5 billion vs Exp. of $13.54 billion), even as it met bottom-line estimates of $0.54, but it is the company's forecast for 2012 that has caught traders off guard, because the technology company is merely the latest one to revise its outlook for the year lower. To wit: "Revenue up between 3 percent and 5 percent year over year, down from the prior expectation for high single-digit growth."

From the Press release:

Business Outlook

Q3 2012 (GAAP, unless otherwise stated)

  • Revenue: $14.3 billion, plus or minus $500 million.; Wall Street's estimate was for $14.58 billion
  • Gross margin percentage: 63 percent and 64 percent Non-GAAP (excluding amortization of acquisition-related intangibles), both plus or minus a couple of percentage points.
  • R&D plus MG&A spending: approximately $4.6 billion.
  • Amortization of acquisition-related intangibles: approximately $80 million.
  • Impact of equity investments and interest and other: approximately zero.
  • Depreciation: approximately $1.6 billion.

Full-Year 2012 (GAAP, unless otherwise stated)

  • Revenue up between 3 percent and 5 percent year over year, down from the prior expectation for high single-digit growth.
  • Gross margin percentage: 64 percent and 65 percent Non-GAAP (excluding amortization of acquisition-related intangibles), both plus or minus a couple points.
  • Spending (R&D plus MG&A): $18.2 billion, plus or minus $200 million, down $100 million from prior expectations.
  • Amortization of acquisition-related intangibles: approximately $300 million, unchanged.
  • Depreciation: $6.3 billion, plus or minus $100 million, down $100 million from prior expectations.
  • Tax Rate: approximately 28 percent, unchanged.
  • Full-year capital spending: $12.5 billion, plus or minus $400 million, unchanged
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Tue, 07/17/2012 - 16:09 | 2625649 koaj
koaj's picture

Can you eat semiconductors? If so, then this is bullish


A nice dual core processor and provolone would hit the spot right now

Tue, 07/17/2012 - 16:13 | 2625671 duo
duo's picture

If you blend it first.  iPhone ground into powder by a blender.



Tue, 07/17/2012 - 16:20 | 2625706 Michael
Michael's picture
Arpaio Set To Unleash “Shocking” Obama Birth Certificate Revelations

Sheriff Joe Arpaio and his Cold Case Posse are set to unleash “shocking” revelations about Barack Obama’s birth certificate at a press conference later this month, information described as “breathtaking” by lead investigator Mike Zullo.

The upcoming press conference is set to be held on July 17 at 2:30 p.m. local time at the Maricopa County Sheriff’s Office in Phoenix, Ariz., with World Net Daily again providing live streaming video coverage.


Press conference will be live streamed here at 2:30 AZ time, 5:30 eastern time.


Tue, 07/17/2012 - 17:19 | 2625969 Hedgetard55
Hedgetard55's picture

We already know it's a phony, problem is no one in authority gives a fuck.

Tue, 07/17/2012 - 18:13 | 2626142 Jay Gould Esq.
Jay Gould Esq.'s picture

I recall Way Back When, SCOTUS was the first to pass on the birth certificate issue.

Those erudite solons apparently set the tone.

Tue, 07/17/2012 - 16:21 | 2625711 azzhatter
azzhatter's picture

Has Cramer issued a buy?

Tue, 07/17/2012 - 16:40 | 2625802 Tirpitz
Tirpitz's picture

He don't need to. The charts suddenly turned bullish. Long and strong.

Tue, 07/17/2012 - 16:10 | 2625652 AccreditedEYE
AccreditedEYE's picture

This has GOT to be already priced in.... <sarc>

Tue, 07/17/2012 - 16:10 | 2625654 kindape
kindape's picture

and....stock trading up


Tue, 07/17/2012 - 16:13 | 2625668 I Am Not a Copp...
I Am Not a Copper Top's picture

Of course it is


Tue, 07/17/2012 - 16:13 | 2625670 101 years and c...
101 years and counting's picture

this would probably be bad for AAPL as well.  that would be if this market was not completely rigged and earnings were .0001% relevant.

Tue, 07/17/2012 - 16:15 | 2625677 seek
seek's picture

It's worse than that, if you did into the details, they padded revenue with a massive increase in server parts -- meaning the normal end-user PC parts did far worse than expected. No wonder they revised 2012 downward.

Tue, 07/17/2012 - 16:15 | 2625678 eclectic syncretist
eclectic syncretist's picture

There is almost certainly a llloooooootttt of accounting fraud going on that until now has not been exposed.  There always is, and it's always recognized well after the fact.  Think Arthur Andersen.  It's going on right now.  Hell, the politicians have given it a green light.  Eventually someone will get in real trouble and the truth will hit like a bomb, but the politicians and bankers are trying to stave it off to the last extremity, and doing a pretty good job of defrauding us right now, if I may say so.

Tue, 07/17/2012 - 16:15 | 2625681 tawse57
tawse57's picture

If bad news like this pushes Intel up in after-market then Nokia's results on Thursday should sent the stock soaring LOL :D

Tue, 07/17/2012 - 16:16 | 2625682 zero19451945
zero19451945's picture

Intel pays a dividend so it will keep going up. Anything with a dividend has a ruthless bid under it.

Wed, 07/18/2012 - 00:43 | 2627034 MeelionDollerBogus
MeelionDollerBogus's picture

Meh. Given how Intel moves with the Dow and Oil, keep an eye out, a Strangle would be fine. Theta is low on the whole options chain, get October or later, you won't likely be disappointed.

Tue, 07/17/2012 - 16:17 | 2625686 RobotTrader
RobotTrader's picture

Same excuses will be used to buy the stock.


Dan "The Greaseman" Niles will trot himself out on stage and say:

1) "Less bad" than expected

2) Profits were up, ex non-recurring items

3) Train is leaving the station, gotta get on board the semiconductors now

4) Company should benefit from the 2nd half v-shaped recovery


I mean really what has changed since 2000?


Same spin, same games being played.

Wall St. is always able to spin up the "Hope Machine".


Tue, 07/17/2012 - 16:19 | 2625696 derek_vineyard
derek_vineyard's picture

robo---me thunk u were liesman disciple

Tue, 07/17/2012 - 16:21 | 2625690 Randall Cabot
Randall Cabot's picture

"To wit: "Revenue up between 3 percent and 5 percent year over year, down from the prior expectation for high single-digit growth.""

Yes, but the expectation was that the prior expectation was not expected to be less then the expected expectation so this is BULLISH!!!

Tue, 07/17/2012 - 16:25 | 2625730 wandstrasse
wandstrasse's picture

the expectation was that the prior expectation was not expected to be less then the expected expectation

according to analysts. The market reaction is a clear indicator of other indicators. Investors are reluctant to buy or sell or to stay flat. The semiconductor market is linked to other markets. Industry insiders say the next quarter will show how the stock develops. etc.

Tue, 07/17/2012 - 16:20 | 2625705 azzhatter
azzhatter's picture


Tue, 07/17/2012 - 16:21 | 2625708 RobotTrader
RobotTrader's picture

Nobody remembers the 2001 crash or the 2008 crash.


But everybody remembers the fabled SOX rally off the 1999 lows, where Fleckenstein, Fred Hickey, and Lance Lewis were aghast at the 300% run in that index over the next 18 months.

Tue, 07/17/2012 - 16:25 | 2625729 Conman
Conman's picture

Not only was your leading premise bad, but your second premise was equally as empty headed. Many made way larger retuns shorting in '08

Tue, 07/17/2012 - 18:09 | 2626128 The Monkey
The Monkey's picture

If you were a deft trader, you made bank on the runup in the bubble, the collapse of the bubble, the recovery, and then the financial crisis.

Question now is how much further this puppy can run before it tops out. We are (slowly) getting there.

Tue, 07/17/2012 - 16:29 | 2625748 adr
adr's picture

Really, I certainly remember the crash right after I graduated from college, and lost three straight jobs as companies went under or my departments were liquidated. I remember going to my first year reunion at college and two people out of 35 that graduated in my specific major still had jobs.

I also remember the starting salary of my profession being cut in half over the ensuing decade as more and more corporations turned away from actually making products, to figuring out ways to profit from stock market fraud.

I'm sure the other millions that are living worse after the 2008 crash, even with the full retard stock rally would agree with me.

Tue, 07/17/2012 - 16:47 | 2625822 One eyed man
One eyed man's picture

I'll bet Ralph Nader remembers the 2001 crash. He was running for prez in 2000 and his financial holding disclosures showed that he owned a house and pretty much all of his remaining net worth was invested in CSCO stock.

Preceeding both of those crashes, the S&P500 went from around 800 to just above 1500 over a course of a few years before the crash. If the S&P goes over 1500, we would be in exactly the same setup once again.

Tue, 07/17/2012 - 16:21 | 2625712 adr
adr's picture

I like that revenue came in at a number + or - $500 million.

So Intel doesn't know where $500 million is?

Next year I am reporting my income to the IRS as Zero plus or minus $60k.

Tue, 07/17/2012 - 16:29 | 2625749 Mark Carney
Mark Carney's picture

Not a big deal sir, please sit in this vehicle.....were going to a beatiful camp.

Tue, 07/17/2012 - 17:18 | 2625966 Rincewind
Rincewind's picture

That's the outlook. Revenue was $13.5.


Tue, 07/17/2012 - 16:31 | 2625757 Meesohaawnee
Meesohaawnee's picture

Bullish!! good for 1370 on the SPX tomorrow. whoo hoo!

Tue, 07/17/2012 - 16:40 | 2625795 Meesohaawnee
Meesohaawnee's picture

i remember the 2001 crash.. Sold Yhoo csco at all time highs.  I just reflect back and think wow. and we thought the interent bubble was  a fraud and a joke. Nothing compared to this! At least there were humans buying and selling. Not saying it was right but it was a least bit a true market.

Tue, 07/17/2012 - 17:03 | 2625898 virgilcaine
virgilcaine's picture

Who needs earnings anymore? This is the benwankie playground, you don't have to worry about that stuff.

Tue, 07/17/2012 - 19:06 | 2626288 Meesohaawnee
Meesohaawnee's picture

soooo true. Like elections. Your conned everyday to think it matters. Neither does data, profits, etc .. just sickens me what we have become... and we used to and still do laugh at china..!! Well we always have been hypocrate nation

Tue, 07/17/2012 - 17:27 | 2626009 TrainWreck1
TrainWreck1's picture

They screwed up pricing of processors.

Ivy Bridge was rolled out at the same price as the last generation (Sandy Bridge)

In all the previous iterations, the newest processors always had a $200 to $800 premium. Now their best is $340-ish"

Last rev top of the line:

CPU's are getting good enough that the rest of the system limits the computers speed, hence less need for some super-Intel chip.

Moore's Law is coming to an end.


Tue, 07/17/2012 - 17:42 | 2626055 Dan Conway
Dan Conway's picture

No problem - the algos will just buy more AAPL.  Voila!  Market goes up! 

Tue, 07/17/2012 - 18:56 | 2626267 Memphis10
Memphis10's picture

Oh boy! I hope this stock goes hella low. INTC has a huge future ahead of its self in the Nano Technology sector (AKA Where the next trillions of GDP will come from) I'd pop huge if I could get it at 20 :D.

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