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Bloomberg's Srinivasan on Intel EPS: Very Solid Numbers (Audio) · Bloomberg Intelligence

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  Speaker 1: Global business news twenty four hours a day at Bloomberg
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  Speaker 1: This is a Bloomberg Business Flight from Bloomberg World Handquarters.
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  Speaker 1: I'm Charlie Pella. Just heard from eBay reporting second quarter
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  Speaker 1: adjusted earnings per share from continuing operations of forty three cents.
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  Speaker 1: Estimates were for forty two cents. eBay boosting its yearly forecast.
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  Speaker 1: Intel second quarter adjusted EPs fifty nine cents, estimates there
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  Speaker 1: fifty four cents, and American Express said second quarter profit
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  Speaker 1: rose thirty seven percent as customers increased spending in the
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  Speaker 1: company booked a billion dollar gain from the sale of
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  Speaker 1: its Costco wholesale core portfolio stocks, hire, S and p
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  Speaker 1: at a record seventy three up nine points, a gain
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  Speaker 1: of four tenths, up one percent. The down Jones Industrial
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  Speaker 1: average up thirty six points, a gain of two tenths
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  Speaker 1: of one percent to eighteen thousand, five nine, has stack
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  Speaker 1: up fifty three to five thousand nine, Gold down seventeen
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  Speaker 1: fifty the ounce to drop of one gold at thirteen
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  Speaker 1: fourteen the ounce. I'm Charlie Pellets, and that's a Bloomberg
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  Speaker 1: Business flash. You're listening to Taking Stock with and Pim
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  Speaker 1: Fox on Bloomberg Radio. Shares of Intel are down about
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  Speaker 1: one and a quarter percent right now after reporting quarterly results.
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  Speaker 1: Here to tell us more on on Trin of Austin,
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  Speaker 1: his senior semiconductor and hardware analysts for Bloomberg Intelligence, providing
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  Speaker 1: unique and real time research and a variety of industries
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  Speaker 1: and markets as well as government factors that affect business.
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  Speaker 1: Our terminal customers can access this function at b I
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  Speaker 1: go on on, tell me about what's going on with Intel.
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  Speaker 1: I think these were very solid numbers, both for the
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  Speaker 1: current quarter as well as for the guidance, which is
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  Speaker 1: a more important factor for semi conductor stocks, which tend
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  Speaker 1: to are be very forward looking. But I think this
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  Speaker 1: is also a case where the stock got ahead of itself.
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  Speaker 1: I mean, the stock is seventeen percent since the twenty
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  Speaker 1: seventh of last month. So you had multiple data points
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  Speaker 1: from the food chain hard to strive makers. You had
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  Speaker 1: market research firms such as Gardner and i DC come
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  Speaker 1: out and saying, hey, the PP business is not as
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  Speaker 1: bad as we thought it was. The US is actually
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  Speaker 1: showing growth. So you had several data points come out
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  Speaker 1: and the stock has moved in advance of that. So
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  Speaker 1: despite good numbers, the stocks a little week. But these
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  Speaker 1: are very very solid numbers across the board, both for
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  Speaker 1: the current quarter as well as guidance. Spin tell me
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  Speaker 1: about the server business at Intel and what that portends
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  Speaker 1: for the future. Look, I mean this is this is
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  Speaker 1: a company and transition as they try very hard to
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  Speaker 1: move away from PCs UM and into focus more on
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  Speaker 1: the data center business, which is UH, which is growing
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  Speaker 1: okay for them, they want to hit year on your growth,
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  Speaker 1: but the in in the long term they well might.
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  Speaker 1: But the more important part of it is is this
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  Speaker 1: is a high profitable business for them, with not as
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  Speaker 1: much volatility UM as the PC business. UM a PC
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  Speaker 1: business does. So if you look at Q two for
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  Speaker 1: the data center business, the average selling prices were actually up,
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  Speaker 1: unlike the PC business, so UM compared to Q two
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  Speaker 1: of last year that UM overall Q versus Q two UH,
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  Speaker 1: they they had a positive mid single digit revenue in
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  Speaker 1: that in that division, UM units were up about eight
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  Speaker 1: percent and selling prices were only down about two On
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  Speaker 1: we should we make anything of those increased restructuring charges
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  Speaker 1: one point six billion of four hundred million from the
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  Speaker 1: previous guidance on restructuring. Yeah, this is part of the pivot.
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  Speaker 1: Pivot might be moving a little faster than than than
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  Speaker 1: initially thought away from the PC business. So it actually
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  Speaker 1: should be taken as a positive step in that they're
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  Speaker 1: a will to reduce headcount and just cost a little
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  Speaker 1: faster than they thought originally. So I think it should
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  Speaker 1: be translated to the positive. The one point, you know,
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  Speaker 1: Intel has hasn't had the best history of timing of
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  Speaker 1: movements in terms of markets. The one thing that I'm
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  Speaker 1: nervous about is the fact that are we moving too
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  Speaker 1: quickly away from PCs just when PCs are starting to
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  Speaker 1: show signs of life. So, um, it's an interesting, interesting
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  Speaker 1: time in the PC market. But we'll have to wait
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  Speaker 1: and see how how that trend plays out. One quarter
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  Speaker 1: doesn't other trend make all right? And just last day,
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  Speaker 1: I want to get your thoughts on the Internet connected
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  Speaker 1: devices and that business. For Intel, it's too small of
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  Speaker 1: a business to be quite honest. They've thrown a whole
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  Speaker 1: bunch of things in there. So it's it's early. Um,
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  Speaker 1: it's early days in that business. But at the end
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  Speaker 1: of the day, the fact that it hasn't caused a
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  Speaker 1: dramatic reduction in sales or EPs, as there is a
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  Speaker 1: lot of that business. Is UH is a step in
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  Speaker 1: the right direction. I'm going to turn your attention now
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  Speaker 1: on onto Qualcom. The stock is up nearly four percent
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  Speaker 1: in after hours trading. Tell us about Qualcom's results. So, Qualcom,
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  Speaker 1: this is a case where expectations were relatively low. The
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  Speaker 1: company has faced substantial loss of market share across the
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  Speaker 1: board UM. So the fact that they came um relatively
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  Speaker 1: in line is slightly better than street numbers for the
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  Speaker 1: June quarter and for the for the September guidances. Is
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  Speaker 1: UH is a step again in the right direction. It's
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  Speaker 1: a question of how management spins. It is what the
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  Speaker 1: long term prognosis for for their presence in the handset
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  Speaker 1: business looks like, yeah, well, they're talking about the September
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  Speaker 1: period that ends in September, and they said that profit
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  Speaker 1: before certain times is going to be between a dollar
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  Speaker 1: and five cents to dollar fifteen cents. Previously analysts we're
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  Speaker 1: looking for a dollar eight eight right, So so again
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  Speaker 1: it's a it's a question of how you how you
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  Speaker 1: The context is, look at the end of the day,
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  Speaker 1: when when we moved from two G, two three G
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  Speaker 1: and three G to four G. The next version of
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  Speaker 1: technology was right there, so as people were moving from
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  Speaker 1: one to the other, Quacolm was always ahead of the
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  Speaker 1: curve and had a certain amount of chips in the
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  Speaker 1: next generation. The problem with US now is Qualcomm is
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  Speaker 1: the market leader in four G and three G and
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  Speaker 1: five G isn't around yet. There's nothing to upsell. So
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  Speaker 1: the Johnny Come late Leads of the world are taking
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  Speaker 1: share substantially from Qualcom in every segment of the market,
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  Speaker 1: and Qualcomm is um the market share leader, and it's
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  Speaker 1: got nothing to do but see that market share, particularly
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  Speaker 1: when pricing comes into play. Well, I'm looking at Qualcom
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  Speaker 1: stock right now up seven and a quarter percent. The
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  Speaker 1: company getting its profit mainly from patent licensing. Tell us
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  Speaker 1: about what they're trying to do. In China, that's the
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  Speaker 1: world's largest smartphone market. Yeah, so this is a market
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  Speaker 1: that is still moving upstream in terms of volume and
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  Speaker 1: the distribution of phones across um UM three G still
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  Speaker 1: moving to four G. So as non brand name phones,
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  Speaker 1: particularly such as Opo, uh cel, Me, Vivo, etcetera, moved
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  Speaker 1: from using um media tech chips to more Qualcom chips
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  Speaker 1: or more importantly PG tips to four D tips their
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  Speaker 1: revenue expand. So anything they can do in China and
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  Speaker 1: spend that story in a positive lady is a good
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  Speaker 1: for Qualcom. Thank you very much. On on scrint of
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  Speaker 1: Bustin Senior Semiconductor and hardware analysts for Bloomberg Intelligence shows
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  Speaker 1: a qual Com up seven and a half percent and
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  Speaker 1: after I was trading, Intel shares down one and a
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  Speaker 1: quarter percent, and after I was trading, this is Bloomberg
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