With Deutsche Bank foundering, oil tumbling to lows not seen since August 11, and futures taking on water, a sticksave had to come from somewhere to avoid another Friday risk-parity fund deleveraging. We got just that moments ago courtesy of Intel, which announced just before the market open that Q2 revenue is expected to be above the company’s previous outlook.
The company now expects third-quarter revenue to be $15.6 billion, plus or minus $300 million, as compared to the previous range of $14.9 billion, plus or minus $500 million. “The increase in revenue is primarily driven by replenishment of PC supply chain inventory.”
The company said it is also seeing some signs of improving PC demand; it was unclear if there was actual improving demand or merely wishful thinking, however the market, desperate for any good news no matter how lacking in credibility, rebounded, sending the Nasdaq all the way in the green. And now we look forward to INTC’s Q3 earnings report in a few weeks to see just how big the miss to boosted upward guidance will be as we intend to #timestamp today’s stick saving announcement.
More from the press release:
The company is forecasting the mid-point of the third-quarter GAAP gross margin range at 62 percent, plus or minus a couple of points, up 2 points versus the prior third-quarter GAAP outlook gross margin midpoint of 60 percent, driven mostly by higher PC unit volume. The midpoint of the third-quarter non-GAAP gross margin range is now forecasted at 63 percent, plus or minus a couple of points, up 1 point versus the prior third-quarter non-GAAP outlook gross margin midpoint of 62 percent.
Third-quarter R&D plus MG&A spending is expected to be approximately $5.2 billion, $100 million higher than the prior expectation of approximately $5.1 billion. Third-quarter gains and losses from equity investments and interest and other income are expected to be a net loss of approximately $125 million, as compared to the prior expectation of a net loss of approximately $75 million. The tax rate for the third quarter is expected to be 22 percent, as compared to the prior expectation of 21 percent.
All other expectations have been withdrawn and guidance will be updated with the company’s third-quarter earnings report on Oct. 18.
Business Outlook
Intel’s Business Outlook for the third quarter 2016 was originally published in the company’s second quarter 2016 earnings release, available at www.intc.com.
Intel’s updated Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments and other significant transactions that may be completed after Sept. 16. Intel’s updated Business Outlook is posted on intc.com and may be reiterated in public or private meetings with investors and others through the close of business on Sept. 16. Intel’s Quiet Period will start from the close of business on Sept. 16 until publication of the company’s third-quarter earnings release, scheduled for Oct. 18. During the Quiet Period, all of the Business Outlook and other forward-looking statements disclosed in the company’s news releases and filings with the SEC should be considered as historical, speaking as of prior to the Quiet Period only and not subject to an update by the company.
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