WEBVTT - Bloomberg's Srinivasan on Intel EPS: Very Solid Numbers (Audio)

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flight from Bloomberg World Handquarters.

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<v Speaker 1>I'm Charlie Pella. Just heard from eBay reporting second quarter

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<v Speaker 1>adjusted earnings per share from continuing operations of forty three cents.

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<v Speaker 1>Estimates were for forty two cents. eBay boosting its yearly forecast.

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<v Speaker 1>Intel second quarter adjusted EPs fifty nine cents, estimates there

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<v Speaker 1>fifty four cents, and American Express said second quarter profit

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<v Speaker 1>rose thirty seven percent as customers increased spending in the

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<v Speaker 1>company booked a billion dollar gain from the sale of

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<v Speaker 1>its Costco wholesale core portfolio stocks, hire, S and p

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<v Speaker 1>at a record seventy three up nine points, a gain

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<v Speaker 1>of four tenths, up one percent. The down Jones Industrial

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<v Speaker 1>average up thirty six points, a gain of two tenths

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<v Speaker 1>of one percent to eighteen thousand, five nine, has stack

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<v Speaker 1>up fifty three to five thousand nine, Gold down seventeen

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<v Speaker 1>fifty the ounce to drop of one gold at thirteen

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<v Speaker 1>fourteen the ounce. I'm Charlie Pellets, and that's a Bloomberg

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<v Speaker 1>Business flash. You're listening to Taking Stock with and Pim

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<v Speaker 1>Fox on Bloomberg Radio. Shares of Intel are down about

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<v Speaker 1>one and a quarter percent right now after reporting quarterly results.

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<v Speaker 1>Here to tell us more on on Trin of Austin,

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<v Speaker 1>his senior semiconductor and hardware analysts for Bloomberg Intelligence, providing

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<v Speaker 1>unique and real time research and a variety of industries

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<v Speaker 1>and markets as well as government factors that affect business.

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<v Speaker 1>Our terminal customers can access this function at b I

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<v Speaker 1>go on on, tell me about what's going on with Intel.

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<v Speaker 1>I think these were very solid numbers, both for the

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<v Speaker 1>current quarter as well as for the guidance, which is

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<v Speaker 1>a more important factor for semi conductor stocks, which tend

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<v Speaker 1>to are be very forward looking. But I think this

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<v Speaker 1>is also a case where the stock got ahead of itself.

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<v Speaker 1>I mean, the stock is seventeen percent since the twenty

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<v Speaker 1>seventh of last month. So you had multiple data points

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<v Speaker 1>from the food chain hard to strive makers. You had

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<v Speaker 1>market research firms such as Gardner and i DC come

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<v Speaker 1>out and saying, hey, the PP business is not as

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<v Speaker 1>bad as we thought it was. The US is actually

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<v Speaker 1>showing growth. So you had several data points come out

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<v Speaker 1>and the stock has moved in advance of that. So

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<v Speaker 1>despite good numbers, the stocks a little week. But these

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<v Speaker 1>are very very solid numbers across the board, both for

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<v Speaker 1>the current quarter as well as guidance. Spin tell me

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<v Speaker 1>about the server business at Intel and what that portends

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<v Speaker 1>for the future. Look, I mean this is this is

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<v Speaker 1>a company and transition as they try very hard to

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<v Speaker 1>move away from PCs UM and into focus more on

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<v Speaker 1>the data center business, which is UH, which is growing

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<v Speaker 1>okay for them, they want to hit year on your growth,

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<v Speaker 1>but the in in the long term they well might.

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<v Speaker 1>But the more important part of it is is this

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<v Speaker 1>is a high profitable business for them, with not as

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<v Speaker 1>much volatility UM as the PC business. UM a PC

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<v Speaker 1>business does. So if you look at Q two for

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<v Speaker 1>the data center business, the average selling prices were actually up,

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<v Speaker 1>unlike the PC business, so UM compared to Q two

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<v Speaker 1>of last year that UM overall Q versus Q two UH,

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<v Speaker 1>they they had a positive mid single digit revenue in

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<v Speaker 1>that in that division, UM units were up about eight

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<v Speaker 1>percent and selling prices were only down about two On

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<v Speaker 1>we should we make anything of those increased restructuring charges

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<v Speaker 1>one point six billion of four hundred million from the

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<v Speaker 1>previous guidance on restructuring. Yeah, this is part of the pivot.

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<v Speaker 1>Pivot might be moving a little faster than than than

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<v Speaker 1>initially thought away from the PC business. So it actually

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<v Speaker 1>should be taken as a positive step in that they're

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<v Speaker 1>a will to reduce headcount and just cost a little

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<v Speaker 1>faster than they thought originally. So I think it should

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<v Speaker 1>be translated to the positive. The one point, you know,

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<v Speaker 1>Intel has hasn't had the best history of timing of

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<v Speaker 1>movements in terms of markets. The one thing that I'm

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<v Speaker 1>nervous about is the fact that are we moving too

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<v Speaker 1>quickly away from PCs just when PCs are starting to

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<v Speaker 1>show signs of life. So, um, it's an interesting, interesting

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<v Speaker 1>time in the PC market. But we'll have to wait

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<v Speaker 1>and see how how that trend plays out. One quarter

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<v Speaker 1>doesn't other trend make all right? And just last day,

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<v Speaker 1>I want to get your thoughts on the Internet connected

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<v Speaker 1>devices and that business. For Intel, it's too small of

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<v Speaker 1>a business to be quite honest. They've thrown a whole

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<v Speaker 1>bunch of things in there. So it's it's early. Um,

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<v Speaker 1>it's early days in that business. But at the end

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<v Speaker 1>of the day, the fact that it hasn't caused a

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<v Speaker 1>dramatic reduction in sales or EPs, as there is a

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<v Speaker 1>lot of that business. Is UH is a step in

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<v Speaker 1>the right direction. I'm going to turn your attention now

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<v Speaker 1>on onto Qualcom. The stock is up nearly four percent

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<v Speaker 1>in after hours trading. Tell us about Qualcom's results. So, Qualcom,

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<v Speaker 1>this is a case where expectations were relatively low. The

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<v Speaker 1>company has faced substantial loss of market share across the

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<v Speaker 1>board UM. So the fact that they came um relatively

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<v Speaker 1>in line is slightly better than street numbers for the

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<v Speaker 1>June quarter and for the for the September guidances. Is

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<v Speaker 1>UH is a step again in the right direction. It's

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<v Speaker 1>a question of how management spins. It is what the

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<v Speaker 1>long term prognosis for for their presence in the handset

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<v Speaker 1>business looks like, yeah, well, they're talking about the September

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<v Speaker 1>period that ends in September, and they said that profit

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<v Speaker 1>before certain times is going to be between a dollar

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<v Speaker 1>and five cents to dollar fifteen cents. Previously analysts we're

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<v Speaker 1>looking for a dollar eight eight right, So so again

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<v Speaker 1>it's a it's a question of how you how you

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<v Speaker 1>The context is, look at the end of the day,

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<v Speaker 1>when when we moved from two G, two three G

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<v Speaker 1>and three G to four G. The next version of

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<v Speaker 1>technology was right there, so as people were moving from

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<v Speaker 1>one to the other, Quacolm was always ahead of the

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<v Speaker 1>curve and had a certain amount of chips in the

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<v Speaker 1>next generation. The problem with US now is Qualcomm is

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<v Speaker 1>the market leader in four G and three G and

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<v Speaker 1>five G isn't around yet. There's nothing to upsell. So

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<v Speaker 1>the Johnny Come late Leads of the world are taking

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<v Speaker 1>share substantially from Qualcom in every segment of the market,

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<v Speaker 1>and Qualcomm is um the market share leader, and it's

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<v Speaker 1>got nothing to do but see that market share, particularly

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<v Speaker 1>when pricing comes into play. Well, I'm looking at Qualcom

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<v Speaker 1>stock right now up seven and a quarter percent. The

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<v Speaker 1>company getting its profit mainly from patent licensing. Tell us

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<v Speaker 1>about what they're trying to do. In China, that's the

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<v Speaker 1>world's largest smartphone market. Yeah, so this is a market

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<v Speaker 1>that is still moving upstream in terms of volume and

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<v Speaker 1>the distribution of phones across um UM three G still

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<v Speaker 1>moving to four G. So as non brand name phones,

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<v Speaker 1>particularly such as Opo, uh cel, Me, Vivo, etcetera, moved

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<v Speaker 1>from using um media tech chips to more Qualcom chips

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<v Speaker 1>or more importantly PG tips to four D tips their

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<v Speaker 1>revenue expand. So anything they can do in China and

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<v Speaker 1>spend that story in a positive lady is a good

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<v Speaker 1>for Qualcom. Thank you very much. On on scrint of

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<v Speaker 1>Bustin Senior Semiconductor and hardware analysts for Bloomberg Intelligence shows

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<v Speaker 1>a qual Com up seven and a half percent and

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<v Speaker 1>after I was trading, Intel shares down one and a

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<v Speaker 1>quarter percent, and after I was trading, this is Bloomberg

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<v Speaker 1>coming up. Bloomberg Laws. Brought you by New York Community Bank.

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