Normally I don’t put up earnings reports, but this one is very significant in that it shows just how fast and deep the global slowdown is. A 23% drop is sales is something worse than a slowdown, it’s horrific. Its impact on a company can be extremely damaging, and not just on that company, but on the entire supply chain as it ripples.
When I was flying as a captain in the airlines, I was forced to take a 33% paycut (an early victim of deflationary forces) and I can tell you that when moves on that scale hit, you must react quickly – as I did, so that you don’t bleed your finances away. The very first victim is new money for investment. That’s what you are seeing on a global scale, don’t think for a second that the largest bubble in the history of mankind can be unwound in a little over a year, it cannot. Also don’t believe that all the monetary stimulus can overcome the power of the unwind, it can’t.
Yes, at some point the adjustments will be made, THEN what the government is doing will NAIL the value of your money – not good. None of this would have happened if the stimulus game had never been started. And even that statement isn’t entirely true, as our debt based money system promotes unsustainable math.
Intel Fourth-Quarter Sales Drop 23%, Missing Forecast
By Ian King
Jan. 7 (Bloomberg) -- Intel Corp., the world’s largest chipmaker, said fourth-quarter sales dropped 23 percent, missing a forecast that it cut by $1 billion less than two months ago and sending the stock down 6.5 percent.
Revenue was $8.2 billion in the period, down from $10.7 billion in the same quarter a year earlier, the Santa Clara, California-based company said today in a statement. In November, Intel predicted that sales would be about $9 billion, compared with an earlier prediction of at least $10.1 billion.
Intel, whose chips run about 80 percent of the world’s personal computers, is losing orders as PC makers curb production. Chief Executive Officer Paul Otellini, 58, has said he expects the current U.S. recession to be the worst of his lifetime.
“The whole supply chain is down 20 percent to 30 percent,” said Doug Freedman, an analyst at Broadpoint AmTech in San Francisco. He had predicted that Intel would report sales of $8.27 billion for the quarter. Computer makers “didn’t build anything -- they shut down their factories.”