Skip to main content

PC business down the tubes

Yesterday I wrote that investors should not be fooled by the increase in New Orders for Computers & Electronic Products in the most recent manufacturing report (read that post).

Prompt confirmation was provided today:
  • Lenovo surprised by indicating they are now expecting a quarterly loss. They further indicated that they will be cutting 2500 employees or 11% of the workforce. The company pointed to lower demand in the commercial sector and slowing sales in China, one of its main markets.
  • Intel revealed that Q4 revenue will now be below expectations: down 20% from the last quarter and down 23% year-over-year. This is lower than its previous guidance which was provided only on November 12. The company said it was impacted by slowing demand from end users and a build-up of inventory in the supply chain.
This goes to show that the PC industry is caving in. Intel was surprised by a drop in revenue over the course of less than two months. Intel is usually pretty good at predicting its quarterly numbers. This implies that December was even weaker than many thought.

It looks like a cold, hard winter for the PC industry. Maybe Intel should apply to be a bank holding company.

Disclosure: none

Comments

Speedmaster said…
Ugly business to be sure. And it's already a cut-throat industry w/ razor thin margins, except maybe for Apple. But I'm very happy w/ the Acer Aspire One netbook I recently bought. ;-)
Like you, many others are moving to netbooks and for manufacturers the margins are even thinner for netbooks...

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Thursday Bounce: Trend Busters, Swing Signals and Trend Leaders for July 9, 2009

This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ . All are based on daily data. Today we have the following: 72 Swing Signals -- A couple of days ago we had 35 signals, today we have twice as many. Happily, we now have 65 BUY signals, a mere 4 SELL Signals plus 3 Strong BUYs. Whoo-hoo! 56 Trend Leaders , all in strong up-trends according to Aroon, MACD and DMI. There are 18 new stocks that made today's list and 60 that fell off Tuesday's list. 48 Trend Busters of which 5 are BUY signals and 43 are SELL signals The view from Alert HQ -- Talk about mixed signals. If you look at our Swing Signals list you would think the market was in the middle of a big bounce. BUY signals are swamping the SELL signals and we even have a few Strong BUYs. Yes, there's a good sprinkling of tech stocks and tech ETFs but the distribution is pretty broad-based with a good number of different sectors represented, eve

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional