Chipmaker Intel (NASDAQ:INTC) just reported its earnings results following market close on July 15. The company reported results that were in line with its guidance for the quarter and forecasted a modest reduction in full-year guidance (from flat to 2014 levels to down 1%).
The numbers show that while Intel is facing a challenging PC market, the business appears to be doing better than many investors and analysts may have thought ahead of the report. To get some more color on the quarter and outlook for the remainder of the year, let's take a look at three things that Intel executives had to say on the call that they want investors to know.
Mobile loss reduction is on track
Intel management had previously told investors the company planned to reduce the losses that it saw in its Mobile and Communications Group, which has now been folded into the Client Computing Group, by $800 million this year.
"We are on track to our annual goal of improving mobile profitability by $800 million, with about a third of the improvement realized to date," Intel CFO Stacy Smith said in a prepared statement.
This loss reduction is welcome, and as an Intel investor, I hope the company can deliver at least a similar amount of loss reduction in its mobile group next year.
Capital spending coming down for the year (again)
Intel reduced its capital spending forecast by $1 billion to just $7.7 billion, following a $1.3 billion reduction last quarter. The reduction, according to Smith, is due to "manufacturing efficiencies" as well as "changes in the timing for purchases."
During the call, Smith further elaborated on the key drivers behind this capital expenditure reduction. The first part of the reduction is the result of "becoming more efficient" at the company's 14-nanometer manufacturing plants. I take this to mean that yields are improving at a solid pace, requiring less capacity to deliver the same number of working processors.
Next, according to Smith, is that the company brought down 22-nanometer capacity and "rolled it forward" to 14 nanometers. Reusing older-generation capacity cuts down on the amount the company needs to spend to put into place next-generation technology capacity.
Third, since Intel is pushing out the broad ramp-up of its 10-nanometer technology to 2017, Smith indicated that this will "delay a little bit some of the purchases on 10-nanometer from when we were on a two-year cadence."
28-nanometer SoFIA in the first half of 2016; 14 nanometers in the second half
In late June, DigiTimes reported that Intel's integrated Atom applications processor with LTE modem would be delayed until early 2016 from a second-half-of-2015 ramp-up as a result of an immature software stack.
On the earnings call, Krzanich confirmed this delay, noting that the LTE version of its integrated applications processor and baseband won't be available until the first half of 2016.
An analyst on the call was also able to get Krzanich to give a firmer launch timeframe for Intel's integrated applications processor and baseband built on its own 14-nanometer manufacturing technology.
"The target for the LTE on the inside for Intel 14-nanometer is the back half of the year," Krzanich said.
Given Intel's consistent difficulties in hitting deadlines with respect to its integrated applications processor and LTE parts, I'm not willing to bet that Intel will actually hit this target.
Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.