Intel misses by a lot… but what’s next?
Bottom line:The fact that Intel had a bad quarter is not that surprising.
Intel reported Q2 earnings and the numberswere not good.
The earnings call didn’t help either.
Putting it diplomatically, management’s commentary and responses to questions did not improve the situation.
You may not be surprised by these numbers.
A few months back,we pointed out that this year would be very hard for Intel.
Until then, Intel’s products will struggle to support the financials.
And maybe now is not the right time to mention that TSMC is raising prices…
They are also cutting their capex plans for the year.
However, the company insisted that these cuts would not hurt their growth prospects.
They repeatedly identified cost savings in their operations, which they are now implementing.
But they can’t have it both ways.
Cutting costs today has to impact the timing of their manufacturing ramp and product launches.
The company largely maintains this is not the case.
This raises the question of why they didn’t make these cuts earlier.
And here we are four months later with one more shoe dropping.
More worrisome, they seem to have lost touch with the market.
To be clear, we think the company has a messaging problem, not a business problem.
We actually think they are doing all the right things to trigger the business.
That would be a colossal mistake.
Six years ago, we wrote about the potentialfor Intel to go private.
Intel has at least another 18 months six quarters of hard times ahead.
