"So let’s start with the data center. It’s about 20% of our revenue. We’ve said we expect
it to be double-digit growth. So if you just do simple manager math, that says it’s just
the data center is giving a couple of points, maybe a smidge more than that, to the
company’s growth rate that we’ve said is low single digits. So just the data center kind
of gets us there."
[Just the double-digit growth in data center will give Intel low-single digit growth for the year]
double digit growth (10%) of 20% is 2% of overall impact
double digit growth (20%) of 20% is 4% of overall impact
offset data center growth with expectations of PC client group growth PERCEPTION of a decline
IDC says something about a 7% decline .... blah blah blah .... Intel is PC company so they are going to contract like PC's ..... blah blah blah
There are lots of negative cases to be made following the market disruptions . Sandy Bridge was TOOOOOOOO good. Ivy Bridge was a TICK. Haswell will stand on the shoulders and take advantage of the 22nm process.
From just the sentence context, I think Stacy said "integer math" rather than the transcribed "manager math".
Read it. Read it again. To me, these Intel execs are not low balling but see single digit growth overall, the best case scenario for this year. Got to factor in 2013 as another year of decreasing pc sales and therefore downward pressure on revenues, and 2014 and beyond when Intel new tech gets seriously reflected on financial statements. Of course this is just my reading and interpretation of these Intel exec's musings. Third and Fourth Qtr reports obviously will show accuracy of any and all previous pronouncements, including mine.
Historically, Intel has provided a couple of general forecasts for the future range of revenue, gross margin and a couple of major expenditures (like below). They have been fairly accurate at hitting above the mid-point unless their is some external change, like the floods that wiped out the hard drive industry. Intel gets these numbers from a bottoms up roll up of discussions with their major customers.
Analysts either take these numbers and judge them up or down OR the analysts do their own bottoms up prediction of results based on changes from IDC, Gartner, ...
The average Q2 estimate from 40+ analysts is $12.89 billion. $100 million below the Intel forecast. They have a spread from a low of $12.70 to $13.02. Notice that all the analysts are inside the Intel forecasted range.
The analysts take the Intel numbers and fudge them a bit this way and a bit that way and ta da ... they apply their black magic and generate target stock values from $16 through $30 per share. That is the spread where the analyst judgment is in question.
•Revenue: $12.9 billion, plus or minus $500 million.
•Gross margin percentage: 58 percent, plus or minus a couple percentage points.
•R&D plus MG&A spending: approximately $4.7 billion.
•Amortization of acquisition-related intangibles: approximately $70 million.
•Impact of equity investments and interest and other: approximately zero.
•Depreciation: approximately $1.7 billion.