Intel chief’s magic words on PCs blunted by skeptics «

    Intel chief’s magic words on PCs blunted by skeptics

    That statement by Intel /quotes/zigman/20392/delayed/quotes/nls/intc INTC -2.60% CEO Brian Krzanich ahead of its analyst conference call should have pushed the company’s stock up in after-hours trading. But instead, its shares fell more than 3%,even with the chip giant’s slightly better-than-expected fourth quarter revenue of $13.83 billion, versus Wall Street’s expectations of $13.7 billion.

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    There are two likely explanations. One, in recent weeks, a few firms have been upgrading the stock after the company’s positive reception at the big Consumer Electronics Show where Krzanich talked about the future of wearable computing and a new market for its chips, the Internet of Things, where every device is connected. The view among some is that, as J.P. Morgan analyst Christopher Danely wrote Tuesday, “we believe the PC market will remain relatively stable in 2014.”


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    Brian Krzanich His note was aptly titled, “Making a Leap of Faith on PCs and Intel’s New CEO.” Intel’s shares are up nearly 9% this week. With a far lower bar having been set for expectations, the sentiment towards the stock seemed improved. Investors also have higher hopes for Intel’s place in the tablet market.

    But one theory among some naysayers is countering the notion that PCs have stabilized. Some analysts say PCs saw an uptick because buyers were rushing to buy the last remaining PCs with the previous generation of the Windows operating system, Windows XP, before Microsoft Corp. /quotes/zigman/20493/delayed/quotes/nls/msft MSFT -1.38% stops making the software and support available. “We believe some of the second half 2013 PC stabilization was due to XP expiration,” said Sterne Agee analyst Vijay Rakesh in a note to clients Wednesday. He reiterated a neutral rating.

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    /conga/story/misc/earnings_wall_threewide.html 293774 In its conference call, Intel CFO Stacy Smith said PC unit shipments stabilized in the second half of the year, with unit shipments of desktop chips up 11% in the fourth quarter.

    Now investors are trying to figure out if the stabilization in PCs will continue beyond the end of the XP sales cycle, and how Intel will really fare in the faster-growing tablet market. Rakesh noted that Intel’s customer wins in tablets are still slow, pointing to a recent tablet win by Qualcomm Inc.’s /quotes/zigman/77257/delayed/quotes/nls/qcom QCOM +0.01% Snapdragon chip.

    On the call, one analyst tried to get more info on how Intel was faring in tablets. Stacy Rasgon of Bernstein Research asked for more clarity on the company’s guidance, and also said, “But you didn’t book any revenues on the tablets, right?” His question was not answered and someone said, “Thanks for the question, we’re going to move on to the next questioner.”