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» Intel CEO Discusses Q4 2010 Results – Earnings Call Transcript
Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on the environment as we currently see it and, as such, does include risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially. Also if during this call we use any non-GAAP financial measures or references, we'll post the appropriate GAAP financial reconciliations to our website, intc.com.So with that, now let me hand it over to Paul. Paul S. Otellini Thanks, Kevin, and good afternoon, everyone. I am very pleased to report another very strong quarter for the company with the highest quarterly revenue, earnings, earnings per share and microprocessor unit shipments in Intel's history. In particular, we were very pleased with the momentum in our notebook PC business and consumer demand for our industry-leading second-generation Intel Core processor family. Relative to the third quarter of last year, our notebook business saw double-digit unit growth, leading to record microprocessor unit volume and revenue. Trends inside the quarter played out largely as we expected. While consumer demand in mature markets like Western Europe and North America remained soft, Enterprise PC demand remained strong and consumer demand in emerging markets continued to rise year-over-year. China was up 12%, India 21%, Turkey 14% and Indonesia 23%. The Global PC landscape is being reshaped. Emerging markets now represent 2 of the Top 3 consumption PC markets in the world. China is now the #1 PC consumption market in the world, while Brazil has become #3. In total, we grew the business by 28%, adding more than $3 billion in quarterly revenue year-on-year. Even excluding the acquisitions of McAfee and Intel Mobile Communications, revenue grew by a full 18% over our Q3 2010 results, which were a record at the time. We have now had 6 consecutive record revenue quarters, and our financial performance is allowing us to return significant cash to our owners via both dividends and buybacks. Our investments to expand our capabilities and create long-term opportunities across the computing continuum are already paying off. Let me give you a few examples.
The Data Center continues to be a key source of growth, with revenues up 15% year-on-year in Q3. During the third quarter, the Data Center business also set an all-time record for storage units. We also announced that our Sandy Bridge-based 2 socket server product, code-named Romley, is shipping for revenue. Demand for Romley is forecasted to be 20x that of Nehalem at the same point of its life cycle, and we expect to launch early next year with almost 2x the design wins Nehalem had at its launch. In addition, we closed our acquisition of Fulcrum Systems, an ethernet switch silicon provider. The deal advances our strategy to deliver comprehensive building blocks across the Data Center from servers to storage and networking.Turning to mobile computing. At IDF, we were proud to announce an extension of the long-standing collaboration between Intel and Google, which will enable time-to-market optimization of Android on Intel architecture. Work on Medfield-based smartphones and tablet designs continues, and we remain on track for Medfield-based devices to launch in the first half of next year. I'd like to give a short update on our acquisitions. McAfee and Intel Mobile Communications, for example, contributed revenues of $1.1 billion in the third quarter. Sampling is imminent for Intel Mobile Communications' LTE product, and earlier today, McAfee launched Deep Defender. This groundbreaking new security product is the first fruit of the collaboration between Intel and McAfee. In PCs, we are beginning to see the first generation of Ultrabooks come to market for the holiday selling season. Industry and consumer interest in Ultrabooks is high, and these early designs offer compelling, thin and light form factories with instant on capability, enhanced security and excellent battery life starting at less than $1,000. And yet, this is just the beginning. Over the next 2 generations, we expect that Ultrabooks will evolve to include features like touch screens and an always-on, always-connected capability, all at mainstream price points, offering a truly exceptional PC experience. With more than 70 designs in the pipeline, we are excited about the future of Ultrabooks. Read the rest of this transcript for free on seekingalpha.com