Paul Gluckman

Q3 revenue in Intel’s “PC-centric” business increased 1% to $9.8 billion on strong notebook CPU demand for remote work and learning, said Chief Financial Officer George Davis on a Thursday investor call. Intel’s July 23 forecast was for Q3 PC-centric revenue to decline by mid-single digits. For Q4, “we see many of the same dynamics” that were in place in Q3, said Davis. “We see continued strength in consumer notebook PCs supported by work and learn-from-home dynamics and from increased supply.” Intel “significantly improved supply” of CPUs in Q3, said CEO Bob Swan. Revenue for the year is expected to exceed its January forecast by $1.8 billion, “even as COVID has significantly impacted our business mix,” he said. Full-year gross margin will be down about 2 points vs. the forecast, on shifts away from enterprise PC products “in a work-from-home, study-from-home environment,” he said. Q3 “turned out to be a very different quarter than we thought going in, a much heavier mix of the entry-level PC markets -- both consumer and education,” said Davis. Average selling prices declined “even as we saw strong unit demand,” he said. The stock closed 10.6% lower Friday at $48.20.

HMTX Industries and Jasco Products, first plaintiffs to file in the massive Section 301 litigation seeking to vacate the Lists 3 and 4A tariff rulemakings and get the duties refunded, strongly oppose DOJ’s prolonged briefing format and schedule proposed Monday in a motion for case management procedures (see 2010200020), said Akin Gump in a response (in Pacer) Thursday at the U.S. Court of International Trade. The government proposed the parties not begin to argue the “merits of this dispute” before 2022 or beyond, it said. “Given the ongoing harms to thousands of plaintiffs, among others, that protracted schedule is unacceptable.” The CIT instead should follow the harbor maintenance tax (HMT) litigation as a model by staying all but the HMTX-Jasco complaint and ordering the parties to file “concurrent cross-motions for summary judgment addressing particular issues, including both jurisdictional and merits questions,” said Akin Gump. Adopting the HMT litigation’s cross-motions procedure “will best achieve the aims of resolving the key legal issues in an efficient manner,” it said. “Unnecessarily delaying resolution of this case for additional months or years -- with all the attendant litigation expenses and accruing duties that would entail -- is unwarranted.” Since more than 3,500 importers filed suit, many of whose entries have already liquidated or will liquidate soon, it’s important “to confirm at the outset that the government will stipulate, as it has in other cases, that a refund remedy is available should plaintiffs prevail,” said Akin Gump. “Such relief remains critical to ensuring that these cases are handled efficiently, effectively, and with the least administrative burden possible.” DOJ hasn’t taken a position on refunds and indicated to plaintiffs it won’t do so until a test case is picked. DOJ didn’t respond to questions. DOJ’s motion for case management procedures is likely to face broader opposition, blogged law firm Thompson Hine Wednesday. "This motion is expected to trigger a raft of challenges by plaintiffs’ counsel in all of the Section 301-related cases on such DOJ positions as the composition of the Plaintiffs’ Steering Committee and the designation of appropriate test cases," it said.

Weekend occupancies at the Venetian and Palazzo “have been as high as 70%,” said Las Vegas Sands CEO Sheldon Adelson on a Q3 investor call Wednesday. The resorts are “working diligently to prepare to safely host convention and group meeting customers from throughout the world,” he said. Resuming a higher volume of commercial “airlift” into and out of McCarran airport and bringing back the convention business “are both critical components to achieving a full recovery in Las Vegas,” said Adelson. CES 2021 was canceled in July as a physical show at the Las Vegas Convention Center (see 2007280034), and the NAB Show was postponed at the LVCC to October 2021 from April (see 2009090049). Sands sees “some bright spots” looming in the Vegas convention and group business, said President-Chief Operating Officer Robert Goldstein. “Some of these large shows still want to come in Q1. We have a couple of major impediments that I don't know how we're going to correct them.” Nevada Gov. Steve Sisolak (D) imposed restrictions on large public gatherings, and “it's very difficult to overcome that,” he said. The Sands organization hopes Sisolak will "revisit those restrictions and enable the market to talk to some of these large shows,” said Goldstein. Sisolak’s office didn’t respond to questions Thursday. The governor announced a loosening of restrictions on large gatherings last month. The positive news is, “we’re getting inquiries from people from all different parts of group market saying 'we want to come back.'” The market needs a “catalyst” to change how people view “being in a place with 30,000, 40,000, 50,000 people,” he said. Goldstein doesn’t see “a lot of change” in Vegas “until there's a change structurally in the governor's position,” plus an increase in airline volume and a change in people's willingness to be in large gatherings, he said.

SiriusXM has had “very productive conversations” with Howard Stern toward a “long-term renewal” of his contract, said CEO Jim Meyer Thursday on a quarterly earnings call, his last before retiring Dec. 31. “From my perspective, we are far along, but it’s never done until it’s done.” Meyer didn't say and wasn't asked if he thinks a Stern deal will be done before he leaves as CEO. Meyer will remain on the SiriusXM board as vice chairman.

Netflix “came pretty close” to its Q3 forecast of 2.5 million net paid additions (see 2010200056) “to land within 300,000 members on a member base of roughly 195 million,” said Chief Financial Officer Spencer Neumann Tuesday evening. “It's super difficult to forecast with perfect precision given all the unknowns,” he said. “Retention trends in our business are healthy.” The company is forecasting slower first-half 2021 growth due to the tough comparisons, said Neumann. “We grew by 26 million members in the first two quarters of 2020. That's more than twice the level of growth we had in 2019.” Since the COVID-19 shutdowns, Netflix has completed work on more than 50 productions, “and we expect another 150 before the year is over," said co-CEO Ted Sarandos. “All that ramp-up puts us back to nearly fully operational in most parts of the world.” Consumers’ desire to watch films at home has been growing during lockdowns, “and we've been satisfying it,” he said. “I think at some point theaters are going to reopen and people are going to go back out to the theaters. I hope so.” People crave “the social interaction to go out and see a film with an audience,” he said. “I don't doubt that is going to come back in some capacities.” Theaters just reopened in Japan at 100% capacity, and people are "looking at the impact of that around the world," he said. The stock closed down 6.9% Wednesday at $489.05.

The coronavirus is having mixed impacts on one tech company. IRobot anticipates “going back to a world” of 25% U.S. tariffs on Chinese-sourced goods once its exclusion expires Dec. 31, said CEO Colin Angle on a Q3 call Wednesday. The pandemic delayed iRobot’s “original plans” to shift most U.S.-bound production to Malaysia by the end of 2020 to reduce or eliminate its Chinese tariff exposure, instead pushing the move “well into 2021,” he said. The stock closed 13% lower at $83.48, a day after reaching a 52-week high of $98.55. Work and learning from home helped drive 43% Q3 revenue growth, said Angle. “The pandemic has impacted individuals and families in profound ways with the home becoming a primary hub for work, education, exercise, entertainment and more.” IRobot took part in its sixth straight Prime Day event last week, said Angle: “Despite the change in Prime Day from its usual timing in early July, it was a solid event.“ IRobot "is cautiously optimistic for a strong fourth quarter,” said Chief Financial Officer Julie Zeiler. “It remains to be seen how the pandemic, an uncertain economic environment and the shifting of an event like Prime Day from July to mid-October will influence the holiday gift-giving season.” The “incredibly challenging period” forced iRobot to make supply-chain “adjustments” to “keep up with demand,” said Zeiler when asked about a notice on the company’s online store it's experiencing shipping delays. “Given all of the growth, there is occasionally a situation on our website where shipping is delayed,” said Angle. “We have the systems in place to make those types of disruptions very short.”

The “mid to high tier” in smartphones “is the place to be” in the test solutions business, said Teradyne CEO Mark Jagiela on a Q3 investor call Wednesday. “These phones are seeing disproportionate growth and complexity related to multiple high-density camera arrays and the associated processing power and storage to manage this data.” The company supplies test and automation equipment to semiconductor makers and smartphone OEMs, with Apple, Qualcomm and Samsung among top customers. The migration to 5G is a big “complexity driver” in smartphones, said Jagiela. “These high tier phones are early adopters of the extra silicon needed to enable these features.” Fewer than 250 million phones will be 5G-enabled in 2020, “and only a fraction of those” will support millimeter-wave, he said. “So despite the bump in 2020, we are still in the very early stages of 5G adoption.”

Netflix had 2.2 million net paid subscriber additions in Q3, about 300,000 short of its July 16 forecast, said the company Tuesday. Q3 net paid additions declined 78% from Q2 and 68% from the 2019 quarter. Netflix is forecasting 6 million net subscriber adds for Q4, which would be a 32% decline from the 2019 quarter. The slowdown in growth was expected, management wrote shareholders: “We think this is primarily due to our record first half results and the pull-forward effect we described in our April and July letters.” Subscriber “retention remains healthy and engagement per member household was up solidly year over year in Q3,” it said. “The state of the pandemic and its impact continues to make projections very uncertain, but as the world hopefully recovers in 2021, we would expect that our growth will revert back to levels similar to pre-COVID.” Paid net adds are likely to be down year over year in the first half of 2021, “as compared to the big spike in paid net adds we experienced in the first half of 2020,” it said. Netflix management is “thrilled to be competing with Disney and a growing number of other players to entertain people,” it said. “Consumers and content creators will benefit from our mutual desire to bring the best stories to audiences all over the world.” Netflix stock fell 5.4% to $497.11 at 4:37 p.m. EDT.

Edge Networks is drawing cord cutters, CEO Todd Achilles told the NAB Show New York virtual event Tuesday. “They’re tired of paying over 100 bucks for a pay-TV bundle, and they want reliable service, which a lot of the streaming services don’t provide because of the unmanaged internet into their homes." The startup is having strong demand in its first market for its Evoca-branded ATSC 3.0-based content service Sept. 1 in Boise (see 2008210021), the corporate chief said. BitPath, “despite the pandemic,” this year launched seven 3.0 markets, with nine more coming, including Mobile-Pensacola going live Wednesday, said President John Hane. The “big one for this year” will be Seattle in December, with “very wide participation,” he said.

CTA plans to charge a $149 fee to most who register to attend virtual CES 2021. The fee will apply to most attendees, including retailers, and journalists will be exempt, we were told Tuesday. The fee was described as an effort to defray expenses. Exhibitors will be offered a series of paid participation tiers, beginning with a basic package that starts at $1,200, up to a five-figure premium offer. The different tiers give exhibitors access to varying apportionments of Microsoft technologies to leverage for news conferences, virtual meetings and other CES activities under the “cloud platform” contract announced Monday (see 2010190043). "As with the live show, there will be a charge to participate and alumni groups will be granted a window to register for free," emailed a CTA spokesperson. "We will be sharing more details closer to registration," which opens Dec. 1, she said. "We will be offering three different exhibitor packages that meet the varying needs of our exhibitors for their CES digital activation." A stickler for auditing show attendance at physical CES events, CTA hasn't determined how the virtual event will be audited for accuracy in attendance, she said. "For live shows, CES has always been independently audited. We are still assessing options for an independent audit including recommended standards."