(Reuters) - Intel Corp's forecast fourth-quarter revenue and margins below Wall Street's expectations, as the personal computer industry weathers a shaky global economy and a persistent shift by consumers toward tablets.
International Business Machines reported revenues below analysts' targets with technology spending held back by a waning global economy, helping send its shares lower.
Commentary
Intel:
STACY RASGON, ANALYST, SANFORD C. BERNSTEIN & CO
"I'm always amazed that they can preannounce and still beat it. Although some of it looks like it was from a tax beat -- some revenue upside, some gross margins. The Q4 guide is weak, revenue and particularly gross margins we haven't seen gross margins like that in a while.
"The Q4 revenue forecast was not surprising, people have been wondering how weak that was going to be. It was fairly obvious that there aren't tons of build from Windows 8, and that was the reason for the preannouncement. I guess they're guiding up slightly on a sequential basis, typically in Q4 you do a lot more. Looks like they're taking a fair amount of underutilization and just looking at the CFO comment.
In terms of capital expenditure, "they took it down for the year and that's normal. What they do in this environment is they will pull equipment off-line, and repurpose what they have for the next process."
DOUG FREEDMAN, ANALYST, RBC CAPITAL
"The gross margins and the earnings for next quarter are below expectations, largely on lower gross margins from under-utilization of the factory, and some pull-in of some startup costs.
"Some people will be disappointed by the fact that the datacenter business didn't perform better. There was some thought that the data centres would continue to do well."
(Reporting By Jennifer Saba in Los Angeles, Malathi Nayak and Poornima Gupta in San Francisco, Jim Finkle in Boston)
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