Earnings

Charges swirl around insider trading on Intel, AMD deals

Updated on October 21 at 7:25 p.m. PDT: correcting, at bottom, for what the U.S. Attorney's office describes as "CC-1."

Think of it as a twist on the old rivalry between chip giants Intel and Advanced Micro Devices. But this time, the rivalry is about which company can make a hedge fund more money.

The complaint filed by the government against six people on Friday details how a relatively obscure Intel treasury executive and a prominent hedge fund manager allegedly participated in an insider-trading ring centered on an Intel investment. The document also shows alleged insider trading of AMD shares by an adviser from McKinsey & Company before the chipmaker spun off of its manufacturing operations.

The case revolves around Raj Rajaratnam, who founded the Galleon Group, a New York-based hedge fund that manages $7 billion in funds. Federal prosecutors charged Rajaratnam and five others on Friday with securities fraud, alleging they were involved in insider trading of some of the most well-known tech companies including Intel, Google, AMD, and IBM.

Jim Walden, a lawyer for Rajaratnam, said Friday, "My client is innocent and we are going to fight the charges," according to The New York Times.

Rajaratnam, a native of Sri Lanka, got his start as a semiconductor analyst at investment-banking firm Needham & Co. and parlayed this into the Galleon Group, where he had a reputation for particularly aggressive information-gathering tactics.

And one of his contacts was Rajiv Goel, a managing director of strategic investments for Intel's treasury group and one of the six defendants.

Goel is not well known inside--or outside--of Intel. In fact, he is an Intel executive apparently so obscure that CEO Paul Otellini said in a television interview Monday that he'd never even heard of him--yet somebody who has dragged the chipmaker into the biggest insider-trading scandal to hit Silicon Valley in years. When asked about the case in an interview with Fox Business News Monday, Otellini said his first reaction was, "'Who's Rajiv Goel'--I'd never heard of this guy," the CEO said, according to a Fox transcript. "He's a fairly low-level guy." Otellini added: "People are people. I don't want to judge him. He hasn't been arrested. I think he's only been charged. If this is true, he's out."

Goel was, in fact, arrested on Friday in San Jose, Calif.… Read more

AMD third-quarter loss less than expected

Advanced Micro Devices posted a third-quarter loss of $128 million, lower than Wall Street projections, while also reporting revenue that beat expectations.

The loss, at 18 cents a share, compares with a loss of $134 million, or 22 cents a share, for the same period last year. Analysts had expected a loss of 42 cents a share.

Revenue was $1.4 billion, an 18 percent increase over the second quarter of this year, while falling 22 percent compared to the third quarter of 2008. Forecasts had called for only $1.3 billion in revenue.

"There was strength in notebooks … Read more

Intel, AMD feud over evidence in antitrust case

Intel and Advanced Micro Devices filed motions on Wednesday in the U.S. District Court in Delaware, seeking sanctions against each other. Both motions are related to the retention of information in the antitrust case filed by AMD in 2005.

Intel's motion asserts that AMD failed to adequately retain documents in the case it filed against Intel in 2005. "AMD misrepresented its efforts and tried to hide its failures from the court and Intel," according to an Intel statement Wednesday.

The chipmaker alleges that AMD's claims about document retention were exaggerated. "Ever since Intel disclosed … Read more

Intel CEO remarks on Netbooks, Windows 7

During Intel's earnings conference call on Tuesday, CEO Paul Otellini talked about the growth of notebook PCs versus Netbooks, and Windows 7 adoption in business, among other topics.

Otellini was quick to trumpet the fact that its mainstream notebook business beat Netbook growth. "We saw the sequential unit growth rate of notebook processors and chipsets actually exceed the growth rate of Atom processors and chipsets," he said.

Later in the call, Otellini said: "While Atom and Netbooks are important growth drivers for us, our traditional notebook business remains one of the primary drivers of revenue growth … Read more

Intel earnings beat Wall Street predictions

Updated at 3:10 p.m. PDT: adding comments from CEO Paul Otellini and CFO Stacy Smith.

Intel's third-quarter revenue jumped $1.4 billion over the second quarter, though year-to-year revenue and profit comparisons were down.

The world's largest chipmaker is struggling to lead the PC industry out of a brutal downturn that saw demand collapse earlier in the year.

Revenue came in at $9.4 billion, beating Wall Street expectations, which hovered at just more than $9 billion. Revenue, however, was down from the $10.2 billion reported in the year-earlier period.

On a year over year … Read more

For Intel, small laptops bring challenge from ARM

Quick: Name an Intel rival whose name begins with an "A" and is abbreviated by three letters.

AMD? How about ARM. Even with attention focused on the immediate impact of Intel's earnings coming Tuesday afternoon, pesky questions linger about a likely future in which U.K.-based ARM and its satellite of chip and device makers pose a growing competitive threat. Maybe more so than Intel's traditional rival, Advanced Micro Devices.

Two recent statements from analysts argue that the camp of companies that make chips based on designs from ARM will dictate future competition in mobile … Read more

Intel executive's exit was sudden

The executive shakeup at Intel that saw vice president Pat Gelsinger leave for EMC appears to have been quite sudden.

An Intel blog dated September 13 shows clearly that Gelsinger was scheduled to appear in the No.2 speaker slot at the Intel Developer Forum--which started on September 22--behind CEO Paul Otellini. The entry in the agenda states: "Tuesday: Keynotes from Intel President and CEO Paul Otellini, IDF veteran and senior VP Pat Gelsinger."

The announcement of Gelsinger's departure came on September 14.

In the final IDF agenda, Gelsinger was removed and his speaking slot went … Read more

Intel's Maloney: Our business is do or die

SAN FRANCISCO--Sean Maloney has some issues with the European Commission's antitrust case against his company, Intel, which he says must either "thrive or...die."

Last week, Maloney was promoted, along with David "Dadi" Perlmutter, to co-manage the reorganized--and massive--Intel Architecture Group. Maloney, an executive vice president, had been Intel's sales chief, and many observers see him as the odds-on favorite to be Intel's next chief executive. (Current CEO Paul Otellini, though, is likely to be in his post for some time to come.)

On Monday, the European Commission published a "nonconfidential version&… Read more

Intel CEO looks beyond the PC

Updated on September 23 at 12:30 a.m. PDT: adding information about the Atom Developer Program.

SAN FRANCISCO--In his keynote at the Intel Developer Forum on Tuesday, Intel CEO Paul Otellini focused on moving beyond the PC while introducing a new processor technology and a new development platform for the Atom processor.

"We're moving from personal computers to personal computing," Otellini said.

He called this a transition to a continuum. "The same experience on any device. How we build this continuum out. That's the theme," he said. "Moore's Law, platform architecture, … Read more

Intel reorg spotlights emerging powers

Updated at 3:45 p.m. PDT, adding discussion about Sean Maloney and David Perlmutter.

Intel Developer Forum chip news took a backseat to a major executive shake-up at the chipmaker on Monday.

Much of the spotlight now falls on two key executives, Sean Maloney and David "Dadi" Perlmutter, who will co-manage the reorganized--and massive--Intel Architecture Group.

"This didn't happen overnight. This has been in the works for a few months," Intel spokesman Chuck Mulloy said.

Perlmutter's rise is not a mystery. He is connected to the Israel-based team that was responsible for the successful Centrino chip platform. "He managed the team that launched the technology that became Centrino," Mulloy said. And he headed the development of the equally successful Intel Core 2 duo--which is closely tied to Centrino--family of products.

Some observers believe that Israel's power efficiency-centric development group saved Intel, when its traditional strategy of cranking up single-core chip speeds to unsustainable levels began to falter.

And Apple CEO Steve Jobs heaped superlatives on Intel's dual-core architecture at Apple's annual shareholder meeting in April 2006. "This new (Intel Core Duo) chip is phenomenal--it blows away anything other suppliers have, including our former suppliers," Jobs said. Apple made the switch to Intel, largely based on the new--at that time--Intel Core architecture.

Maloney, most recently, has been Intel's globetrotter (unofficially) and its sales chief (officially). He travels constantly and had been based in the critically important Asia-Pacific region from 1995 to 1998, managing Intel's sales and marketing activities there. He was promoted to senior vice president in 1999 and executive vice president in 2001.

Maloney also led the Intel Communications Group, which was not considered to be a success in… Read more