Read an interesting article, the new CEO could use this one time only to lower guidance and give Intel more breathing room. It's not a question of the health of the company, it's a question of how much money does he want to take off the table for next quarter? Your thoughts?
The smart move is to lower guidance bigtime to ensure the company will exceed expectations for the next 2 years. Whats kept the stock down the past year is the "fear" that Intel will not meet forecasts. Paul O. was an idiot in this regard (among many).
Option A: reset expectation. lower guidance and set the bar lower going into 2014, when 14nm puts INTC literally years ahead of the competition on fabrication.
Option B: The guidance was already lowered all last year and Q1. P.O. lowered guidance several times last year before he left. Option B is is B.K. comes out shooting; beat EPS top and bottom, raise guidance (P.O. loaded costs and capex in 2012 and Q1), and a dividend increase. Cue short squeeze and bear Armageddon.
Option C: no one knows. too many variables and too many possibilities. Longs chuckle at the bumps in the road, shorts try to squeeze out a couple more bucks. Option holders #$%$ their pants or jump for joy. Not even the Street can agree what it means.
It's not a "need" to lower guidance, it's the realization that the new CEO has one gimmie from Wallstreet. Let me tell you, when I did industrial sales every freaking quarter they had us write up projecttions for the quarter They kept tricking up. Now, if I were new to a position i would come in ten to 15 percent lower in the first quarter as a transition period because it could make or break my commission checks for the next couple of years.