Intel Corp. (INTC) Chief Executive Paul Otellini said Wednesday the company is making progress on its review of its business.
Speaking during a conference call to discuss second-quarter results with Wall Street, Otellini said the chip giant is a "bit" more than halfway through with its review process.
Intel said in April it would overhaul the company and take $1 billion out of projected spending in 2006. During the second quarter, Intel announced the sale of its communications business and announced the elimination of 1,000 management positions. Intel expects to end the year with a total work force below 100,000. Chief Financial Officer Andy Bryant said the company may make actions in the next two months that could take its work force number even lower.
According to Otellini, during the second quarter Intel lost a "bit" of microprocessor market share on a "billing basis" but gained on a consumption basis adjusting for inventory reductions. Otellini noted Intel is well-positioned for the second half of the year. He said the new products launched during the second quarter give the company a three-tier brand strategy and enables it to cut prices on its Pentium line of chips to a level it hadn't addressed in the past.
Nevertheless, CFO Bryant said revenue for the full year will be lower than its previous target. According to Bryant, Intel's annual revenue will likely come in lower than the 3% decline the company had previously targeted on a year-over-year basis.
For its third quarter Intel is targeting revenue of between $8.3 billion and $8.9 billion. Analysts, according to Thomson First Call, had Intel reporting third-quarter revenue of $9.05 billion. Bryant said Intel expects a slight increase in inventory during the third quarter and a slight decrease in the fourth quarter. "If I was to see $200 million (in inventory) it wouldn't startle me," said Bryant. He noted the pricing environment remains competitive but that demand for Intel's products seems "pretty normal" in terms of units.
For its second quarter, the Santa Clara, Calif., company said profit fell to $885 million, or 15 cents a share, from $2.04 billion, or 33 cents a share, in the year-ago second quarter. Revenue declined 13% to $8.01 billion from $9.23 billion a year ago.
Analysts, some of whom warned the second quarter would be a bad three-month period for Intel, had expected the chip giant to post revenue of $8.26 billion and earnings of 13 cents a share.
In after-hours action shares of Intel slipped less than 1% to $18.25, according to Island ECN. The stock finished the regular trading session at $18.49, up 28 cents, or 1.5%, on volume of 86.5 million shares. Average daily volume is 75 million shares.
�Nevertheless, CFO Bryant said revenue for the full year will be lower than its previous target. According to Bryant, Intel's annual revenue will likely come in lower than the 3% decline the company had previously targeted on a year-over-year basis.�
Who the hell would want to buy this chicken-shit stock? I can�t believe this stock isn�t down further.