Intel just blowing smoke

After releasing its first quarter figures, Intel's top brass reflected on the shrinking industry, proclaiming "the worst is behind us." CEO Paul Otellini says the company believes PC sales found the bottom of the market during the first quarter, and is now returning to normal.

Intel had $7.1 billion in sales for the quarter, down from $9.7 billion a year ago and down 13 percent from the previous quarter. And that's not good by anyone's reckoning. But here's where the Wall Street magic comes in. Analysts had issued pessimistic projections for the quarter, with some even speculating that they may not even turn a profit. So when Intel did come in profitable for the quarter, even though profit was slim, they were able to celebrate. But in reality, the bar had just been set low from the beginning. It doesn't mean we've hit bottom and the PC industry is now turning around. And Intel knows that they're just blowing smoke--that's why they didn't provide oficial guidance (revenue projections) for the second quarter. If they really thought the bottom had been found, then they would have issued guidance.

What Intel earns, and what they think they will earn in the future, is especially important for the whole industry, since the company is considered a belwether--that is, as Intel goes, so goes the market.

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