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Paul Sakuma / AP Intel's headquarters in Santa Clara, California. |
Amid swirling news stories covering what was and wasn't said about Intel's current financial expectations by the company's CEO, CNBC has obtained the language contributing to the controversy.
Earlier Tuesday, Bloomberg News posted a story saying that Intel could swing to a loss in its first fiscal quarter, the first in 87 quarters. That news set off a flurry of coverage, including a story I posted here quoting an Intel source as saying that it was a "stretch" to take the comments from CEO Paul Otellini and translate them into a prediction of a loss on the quarter.
This source said the comments didn't come from an internal memo, but instead from a transcript of an internal Intel Q&A session between Otellini and employees following Intel's earnings announcement last week.
The article, posted on Intel's internal "Circuit" employee newsletter, quotes Otellini as pointing to the company's profitability streak, and then saying that "Q1 is too close to call." He adds that Intel is "focusing on every nickel spent" and every dime made. He pointed out that aggressive cost-cutting measures by Chief Administrative Officer Andy Bryant led to $100 million in savings during the fourth quarter. And he concluded that, "We've had 87 quarters of profitability and it would be great to continue that through this recession."
That was the entire exchange on which this evening's coverage was based, this source tells me, and it was immediately elevated to "Intel's gonna report a loss" or "there's a good chance Intel will report a loss."
Analysts had already projected only a 2 or 3 cent a share profit on the quarter so even a relatively small financial change on the top line could have led to a loss on the quarter. In that respect, it should come as no surprise that Intel is not discounting the possibility.
But this source says it is simply too soon to make the call one way or the other, as Intel has maintained from when it reported earnings last week.
This isn't new, this source says. Seems like more of a reality check to me. And Intel [INTC
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] shares haven't reacted much to any of this since the stories began to break this afternoon.
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