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January 16, 2008
The intangible called confidence
From this morning's Wall Street Journal - Intel's Profit Surges 51%, but Outlook Is Cautious:
Intel Corp. posted a 51% surge in fourth-quarter profit but sounded a cautious note about business conditions in the first quarter and the rest of the year.
The forecast by the giant chip maker, whose results are seen as a gauge for global technology demand, sent its shares down more than 14% in after-hours trading.
Profits up 51%; stock price down 14%. What is going on? Confidence in the future direction. As the story points out:
But with the widely reported jitters about economic conditions, mainly in the U.S., the company is watching out for signs of a slowdown. John Lau, an analyst at Jefferies & Co., noted that Intel's first-quarter forecast points to a 10% decline in revenue compared with the fourth period, where revenue typically falls 7% to 9% because of seasonal factors. "It certainly doesn't give us a good feeling that it would be better-than-normal seasonality," he said.
So the fact that the revenue forecast is 1% to 3% lower than what might be normally expected is taken as a sign that the bottom may be falling out.
And how do you factor that intangible in to your calculations?
Posted by Ken Jarboe at January 16, 2008 10:09 AM
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