Not directly related to NN, but certainly a bellwether to the entire tech sector, Intel held its quarterly cc this afternoon.
intel.audionet.com
Highlights from my notes:
* new records in revenues and shipments
* 3 of 4 geographical areas had solid growth, slight decline in Japan
* inventories dropped in days held
* Celeron (?) processor had 4X volume growth -- "extremely pleased"
* growth in networking products --- record quarterly revenues
Q&A
Q: Shape of demand? (Don't you love analysts questions?)
A: Q4 always depends on Sept. Growth picked up [after Aug.] and has maintained its pace.
Q: You've estimated 3% growth. Any room for upward revisions?
A: Of course. That's always possible. Right now we're trying to rebuild inventories so we can respond to customer needs.
Q: Capital expenditures for '99?
A: Figures available in January
Q: What challenges in 4Q?
A: Biggest demand is to produce enough to meet customers' needs.
Q: Situation in Japan for '99?
A: We've seen it bouncing along. . . don't see it changing in foreseeable future.
Q: Xeon chip --- short supply?
A: Struggling to catch up to demand. Pretty good shape now. Four-way and above out of constraint in a month or so.
Q: Visibility for Q4 --- turns and so on?
A: Distributors want more product (dist. rep. 1/3 sales) OEMs want product early; direct sales want as needed.
Q: [Something about US vs. Europe --- hard to hear question]
A: 4Q is peak for Europe. That will continue.
Q: Celeron up 4X --- will this affect the growth of Pentium II?
A: Celeron will replace the Pentium processor eventually --- not completed yet. Priced at the low end of PentII --- want to show customers reasons to buy up.
Q: Q4 growth? Ordering closer to need?
A: In general inventory better than year ago. Pipelines thinner and shorter.
Q: Drivers for '99?
A: 1) upmarket servers and workstations, 2) U.S/Europe Internet trend, and 3) Asia and Japan --- hoping they'll pop back, but still wait and see.
Q: Why caution in Q4 guidance?
A: We look at orders and normal turns rate and see Q3 good and think Q4 good, too.
Q: Comment on GMs up slightly?
A: If revenues are up slightly, then gross margins will be up slightly.
Q: Backlog?
A: Little backlog, yes.
Q: Expenses, where?
A: 3Q bigger advertising costs. Build R&D a little.
[Kurlack]
Q: ASP issue: if operating profits are down in dollars by 6% and revs are up 9%, how come flat?
A: Change is attributable to change in parts [costs] of new products.
Q: Xeon ramp?
A: Happy with acceptance. Extremely pleased with benchmarks on high-end -- very good re: production in '99.
Q: How ASPs flat for 5 Qs?
A: Memory pricing a factor. Heart of the answer is our segmentation strategy --- working each segment. Growth at high-end balancing less at low-end.
Q: Orders staying at high end of September?
A: Year ago inventory problems --- now steady backlog relative to demand.
Q: Market share?
A: No guidance.
Q: Feedback from different customers regarding strength of markets?
A: I'd rather you ask them.
Q: Fastest growing revenue segment?
A: Xeon PentII, Celeron also.
Q: Acquisition rumors?
A: no comment --- will pass on that one.
Q: Head counts?
A: No more forced attrition. Not a big number.
Q: .18-micron -- what percentage can we see 1st half, 2nd half?
A: First half negligible; second half small.
Q: Capital equipment in '99?
A: .18-micron requires capital equipment; Buying some for next generation .13.
At that the session ended abruptly. Perhaps they had a set amount of time.
If any of my comments don't make sense, you can clarify by calling 402-220-0880. Press 9 for fast-forward; 8 for pause; and 7 for 30 seconds backwards.
That's it for now.
Pat
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