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Intel's CFO More Than Cautiously Optimistic

Tuesday, 14 Jul 2009 | 6:56 PM ET

I spoke with Intel CFO Stacy Smith moments after the company released its second quarter earnings report and he sounded an optimistic tune, to say the least. See Video Below.

More than just upping guidance on both revenue and gross margins, Smith reaffirmed Intel's bold and controversial call last quarter that the PC industry had reached a bottom.

He says the company's second quarter numbers, and third quarter guidance, more than prove that, and he expects seasonal improvements through the back half of 2009.

That comes as particularly good news with some reports as late as today signaling a softer than expected back-to-school shopping quarter. But Microsoft's Windows 7 release should help, at least on the enterprise side of things.

Further, I asked him about the trends surrounding netbooks, and their low-cost, low-margin reputation and why that didn't seem to hurt Intel at all.

He says the netbook business, built around a low-cost Atom microprocessor, was doing exceptionally well.

He says the chip might be low cost, but it still enjoys a very respectable profit margin, and we're seeing the dividends of that played out in the company's earnings.

Intel CFO on Earnings
CNBC's Jim Goldman discusses Intel's latest earnings announcement with Stacy J. Smith, Intel CFO.

Finally, I asked about the unusual nature of the Intel release, providing both GAAP and non-GAAP numbers.

He says the only difference between the two results is the $1.45 billion fine from European regulators and the dual report was designed to give investors a truer picture of Intel's performance on the quarter. I asked if by including the fine in the report tonight was an indication that Intel was abandoning what had been a fairly aggressive appeal of the anti-trust levy. He said the fine was accrued on the current quarterly report because of accounting rules, but that investors should in no way take that decision to mean Intel's abandoning its appeal plans. The appeal will continue.

Questions? Comments? TechCheck@cnbc.com

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