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Inside Intel’s Earnings Report

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    Stacy Smith, Intel CFO, breaks down Intel’s fourth-quarter earnings report.

  • Duration 7:02
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Everybody Intel released its fourth quarter results earlier this hour -- now we've got the guy calling the money shots inside the world's largest chip giant.

He is Stacy Smith Intel's chief financial officer and executive vice president.

I remind our viewers this is a Dow component it is a widely held stock it may be in people's portfolios their pension Stacy.

Right now the stock is trending lower than where -- closed but there was a big pop right of more.

The top of the hour when you guys I don't know was that a fat finger punch -- came out earlier than we expected in fact before the closing bell.

Yeah our our normal process is a come out of one minute or two minutes after the hour we're following up I'm kind of -- in the process that happened it looks like it cannot a couple minutes early.

Okay maybe maybe somebody tripped and fell on a keyboard.

What -- -- find out I don't know you know the market the market gets all black helicopter about the stuff but they're also looking bright now -- your guidance.

You look let's let's get to the headline you met for the current quarter I mean that the previous quarter that -- reporting for you met on revenue needs in fact it was that you just a bit of the slight speech here and a bit of -- -- on the EPS but.

It's the current quarter revenue estimates that may be spooking the markets you're saying about twelve point seven billion give or take 500 million -- hear their -- Some of the other estimates were twelve point nine billion.

What do you see for this current quarter that would keep it just slightly lower than what some are looking for.

Well actually the revenue guidance for the first quarter is.

A little -- than what you normally expect as you go from Q4 to Q1.

-- for 2013.

Were forecasting.

Low single digit revenue growth.

And my expectation is we'll see some acceleration in the back half of thirteen.

-- -- kind of think about the year.

You have a couple of tail -- I think it can first is most economists are predicting that the second half.

GDP growth around the world is better and we do correlate that.

And then secondly we've had this tremendous product cycle over the course of twelve.

We're now in tablets we have these great new devices with -- two books and convertibles what's kind of the best of if you see in the best of the tablet.

And we think that that in conjunction with touch enabled devices really kicks in in the back half and drive some.

Growth -- look let's not let's gloss over ultra books -- what I find fascinating is that.

You guys pushed an entire industry to move unbelievably quickly.

Coming up but the concept of an -- book which -- let's call it what it is it was a way to take on Apple's very -- and sexy.

Power Macs and things like out of and MacBook pros -- -- and now suddenly there are 140.

Designs out there whether to -- or -- or look no power Hewlett-Packard or Dell you don't see.

The hardware guys move this quickly you have but are the numbers where you want -- to be your CEO Paul Otellini had kind of hope that -- but -- 40% adoption meaning all.

40% of all laptops would be these ultra books -- not there yet do you expect we'll get there in 2013.

Yeah I mean that the the first objective that we had was to work with the industry to enable innovation and and I think it's been spectacular success -- blender is that it right -- crucial evidence.

That a year ago we were just starting to talk about it today -- we really have redefined.

The the notebook market and we think about thirteen that next level of innovation is going to be around touch and convertibles.

I'm in terms of the penetration rate you know we're we're hitting the price points we need to hit today.

We -- touch enabled devices in the market for 499 Canada at -- -- we saw some.

Skews even at 399 so we're hitting the price points we're hitting the innovation.

It's against the backdrop little weak macroeconomic environment -- -- now we're very optimistic and.

Isn't you know go through thirteen the whole point of for windows say was to make it touch screen enabled.

We share from Microsoft that windows -- is trending.

And the same trajectory -- -- Windows 7 was not enough free army which I'm sure you guys would've -- to see a little bit faster adoption of windows eight there.

But you know it it it it was late in the fourth quarter when it came -- not later than they said -- just generally in terms of the buying season and so no we're we're quite pleased with what.

Is happening in the market you know the the operating system if you played with the it enables a great touch experience.

It's a modern UY and you put that in conjunction.

With a great piece of hardware you know a convertible and something very thin and light with all -- battery life and I think it's a really compelling device.

Let me get to Smartphones.

As you push into that realm but not as quickly as some of the other names like Qualcomm but the past four months we've seen a -- -- patent war between Samsung and apple.

But apple uses Samsung's chips and some other Smartphones and they're now -- mortal enemy.

The only other entity that could scale up quickly enough for a huge roll -- for the next Apple iPhone I would say would be Intel.

Do you expect that in the next year 2013.

That iPhone.

Will have Intel chips inside.

So you know our our our arm our policy in the says.

That we never talked about a customer design -- until they go and talk about it particularly -- and the phone space.

When I look back at 2012.

We weren't in any phones when we started the year.

Today were in seven shipping funds that are shipping across twenty different countries.

I think people expected that once we got into the space we have leadership in terms of performance.

I think -- we surprise people is that we also have leadership in terms of the power efficiency.

Of our silicon and I think we're in a great position to build on it from here.

I also wanna say I don't think it.

Moves the needle from the standpoint of revenue in 2013.

But we have -- -- when momentum that's gathering and we just want to build on that as we work our way through little.

Move will your Smartphone ships move the needle in 2014 to think what that point would you start to see that bigger move.

The united I'd expect to see good unit growth in 2014 and which is -- -- from here last question and and listen the it was a big topic of buzz around the Consumer Electronics Show.

What is Intel doing in television I personally think that you know everybody's waiting for apple TV Google TV it's not happening is Intel -- we know you've hired people.

To look into this but -- Intel working with the cable operators to come out I don't wanna say set top box but but something some type of device that will make television.

A lot better experience and we won't have to have a cable.

Box of some sort.

You know it's -- inserted this on the -- question that similar to tiger about customer.

Design wins and until their ready.

This is a place where we're gonna comment we think that we have.

Great silicon.

-- that leadership silicon probably is appropriate you know in the Internet of things and the data center in clients that we're not gonna -- this doesn't.

I I I'm looking at that it may be a yes but all -- -- let me just told on the back common thank you Stacy very much for joining us.

Thanks great to be back any time Stacy Smith -- Intel chief financial officer and executive vice president David.

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