Paul, Tony and Thread, about the Conference Call:
I just listened to the conference call. Andy did not say "significantly" higher revenue - he said "up." He did not sound defensive to me - just a little serious. Here's the summary:
About revenue:
- There are 3 ranges: "slightly up/lower", "up/lower", and "significantly up/lower"
- "Slightly lower" for example was Q1 to Q2 where we did 5%
- "Slightly higher" was Q2 to Q3 where we did 7%
- For Q4, we'll be "up"
[Side note: I noticed he didn't say "significantly up" which occurred awhile ago when at ~15%. To me, this means Q4 revenues will be higher than 7% but less than ~15%. "Up" is better than "slightly higher" but not as good as "significantly up"]
Other comments made:
- The ASP decline has slowed down significantly
- We are pleased with Itanium. Running on Win-64, Linux, HP OS, IBM OS
- We see strong seasonal demand across all product lines for Q4 across all geographies.
- Costs are less than our target [this is good] for Q4.
- I think they said Celeron was fixed as a % of overall unit shipment
- ASP decrease in Q3 due to two things (I believe he said):
1. gain in market share in value PC market and
2. underestimating the impact of higher performance product pushed
from Q3 to Q4.
- about Q4 revenue... Andy said "stronger statement than what we began with Q3"
- Q4 GM will be a couple of points higher (GM 58.7 for Q3, so that's 60.7 for Q4!) because of improvement from .18 lower unit costs, inventory costs, and something else which I missed
- cost/unit better than we expected (good for Q4, but impacts Q3)
- Operating expenses... short-term aberrations...but should go back to traditional model
- 50% Europe P3 (retail ?) in Q3
- Both stories of Y2K are alive and well from our customers [i.e. those who buy now vs. those who buy later], therefore we're seeing normal growth
- Question: if no .18 problem, would you have had no GM problems? He said "Yes"
- IMPORTANT: INVENTORY LESS THAN EXPECTED... WE DIDN'T ANTICIPATE THIS MUCH DEMAND SO WE ARE PUSHING OUR FABS AS MUCH AS POSSIBLE. Right now, with fabs, we are trying to, I would like to build up inventory in Q4, don't know if we will be able to or not !!!
[Note: This translates to me: a very healthy demand for Q4]
- integrated graphics can alleviate the demand problem which exists for graphics
- Tad asked if the flawed introductions were random or systemic problems which could be fixed. Paul O's answer was: "I hope they are random... our road map is moving faster than before due to competition and market. I think people don't give us enough credit for some of the complexities of...
- Not impacted by Quake
- Price of DRAM and Graphics up
- Question: Will ASP bottom out? Answer: we don't give guidance on ASP, but I can tell you: GM will be up a couple of points and we will ship more high-end products and the rate of decline on ASP was less in Q3 than in the previous quarter. That should give you a good idea.
Cheers !
Amy J |
