Intel forecast fourth-quarter revenue and margins above Wall Street estimates on Thursday, optimistic about a healthy rebound in personal computer sales, improvement in its data center business, and a growing lineup of customers seeking its manufacturing services.
Oh, man
Propaganda MinisterCEO Pat strikes again.Before you downvote me here are some facts. Intel is cooking the books:
The actual earnings release from Intel
Margins rise, yeah? What do you as a layman associate margins with? I sell stuff and after expenses i get to keep some money yes?
Page 6:
Loss before taxes: $54 Million
Tax benefit, i.e. tax break. $310 Million.
Net income $297 vs revenue of $14.158 Billion.
Page 13 Operating Margin: -0.1%
But what? Where are the margins rising as in the article?
Intel is
selling off assets, mostly parts of mobileye
getting tax handouts. The aforementioned $310 Million.
extending useful time for equipment from 5 to 8 years.
Shutting down business units like it is no ones business.
Look up GAAP vs. non-GAAP. (That is why GAAP accounting rules exist so companies can’t pull these kind of stunts with impunity)
So their business is not contributing to anything. Intel is living off it’s substance and is using that to make it’s books and subsequently headlines look pretty.
If their operating expenses are lower due to layoffs, they’re going to have better margins…
Yeah that depreciation change was just scummy. Suddenly the assets you have are roughly 60% more valuable than the day before making the change? Why not just go with a 10 year depreciation at that point.
Depreciation change I think they made 1 year ago.
Depreciation rate has no such effect on asset value. In practice it only chances which year their huge outgoing cash flow for investments actually shows in their books. The international standard requires them to try to match the estimated lifetime with actual lifetime of the asset.
Incidentally, intel changed some estimates from 5 years to 8 years. If they expect to be using that equipment for 8 years then that makes sense.
Usually companies would prefer faster depreciation but there is an argument to be made that it does benefit them in terms of taxation to have slower depreciation now that they have smaller profits.
That’s not what cooking the books means.