Cloud and network infrastructure and PC capabilities were "vital in allowing businesses and people to continue to work, learn, stay connected and provide critical goods and services,” said Intel CEO Bob Swan on a Q2 investor call Thursday: Those trends helped Intel generate $19.7 billion revenue, exceeding forecasts by $1.2 billion. The company is making “significant progress” boosting its factory CPU capacity and improving its supply chain, he said. “We’re on track to return to more normal levels of PC inventory as we work through the second half of the year.” The downside is “yield” delays in its 7-nanometer chip process technology that's pushing commercialization schedules about “12 months behind our internal target,” said Swan. “We’ve root-caused the issue and believe there are no fundamental roadblocks, but we have also invested in contingency plans to hedge against further schedule uncertainty.” The stock closed down 16% Friday at $50.59. The “global problems we face are bigger than any one company can solve alone,” said Swan. It established 2030 “corporate responsibility goals” that call for a “collective response to revolutionize health and safety” and make technology “fully inclusive,” he said. The $50 million it committed to a “pandemic response technology initiative” typifies Intel’s “unique ability to partner and collectively solve critical problems.” The initiative will speed access to technology for patient care, said Intel. Chief Financial Officer George Davis said to expect "the weak economic environment will impact our commercial PC business, particularly the desktop.” The chipmaker expects the PC market to decline by high-single digits year over year in Q3, the CFO said.
The International Trade Commission “is working on technology that will permit virtual hearings,” Administrative Law Judge (ALJ) Dee Lord told Sharp and Vizio lawyers in a June 24 telephonic hearing, according to a transcript (login required) posted Thursday in docket 337-TA-1201. Lord is running the ITC’s Tariff Act Section 337 investigation into Sharp allegations that Vizio, its panel maker Xianyang CaiHong Optoelectronics, and TV set assembler TPV infringe five Sharp LCD patents (see 2005210041). The ITC picked Webex Meeting as its videoconferencing platform for Section 337 hearings and conferences “involving confidential business information,” said a July 20 update to its COVID-19 procedures. It’s working as quickly as possible to implement the software, but use of the technology will be at the discretion of individual ALJs, it said. “I'm not sure that I will conduct a virtual hearing in every case,” Lord told the attorneys. “We have had to make some significant adjustments at the ITC in the way we do business,” she said. “We have to assume that we're not going to have a live hearing, and we may not have a hearing procedure that's anything like what we're used to.” ALJs and ITC staff “are all trying really hard to make these investigations work,” she said. “I think so far we have been succeeding pretty well.” As issues arise due to the COVID-19 pandemic, “we will deal with them,” said the ALJ. “It's impossible to foresee what may happen at this point.”
Verizon took a 14 cents a share COVID-19 hit, said Chief Financial Officer Matt Ellis on a Friday investor call. The carrier said the pandemic sent revenue declining 5.1% to $30.4 billion mainly due to lower equipment sales amid store closures and the pandemic's impact on “customer behavior.”
Critics of Nokia’s complaint seeking an exclusion order on allegedly infringing Lenovo devices “fail to raise any cognizable” concerns that “merit burdening” the International Trade Commission with a “fact finding” on public interest implications of an import ban, replied Nokia Wednesday (login required) in docket 337-3466. The issues unique to the standard-essential patents (SEPs) on H.264 video compression asserted in Nokia’s complaint justify building a public interest record, argued the App Association, the Computer & Communications Industry Association and Google (see report, July 21 issue). Banning the Lenovo goods couldn’t come at a worse time, with the COVID-19 pandemic taxing supplies of laptops and tablets, said critics. Nokia countered the “accused Lenovo products are a small fraction of the U.S. supply.” Any void “could easily be replaced by over a dozen competing makers, including Microsoft, Samsung, and Dell,” it said. It’s untrue, as CCIA “boldly argues,” that "the ITC is never a proper forum for investigating” infringement of any SEP, said Nokia. “Such a prohibition would be a drastic shift” from policy, it said. “Exclusion orders must be available as a remedy for SEP holders to maintain a balanced patent system and avoid harming innovation and competition,” the company said. A Dec. 19 joint policy statement from DOJ, the National Institute of Standards and Technology and Patent and Trademark Office supports that, it said.
A “key thing” about the Trade Act Section 301 tariff exclusions on Chinese goods that have been granted or extended is that most end Dec. 31, Nicole Bivens Collinson, Sandler Travis president-international trade and government relations, told a Sports & Fitness Industry Association webinar Thursday. If President Donald Trump is reelected, she believes his administration “will view that as a mandate” for eradicating tariff exclusions permanently. As an importer, “I would be looking at January as having tariffs in place without any exclusions,” she said. If U.S.-China relations further deteriorate, Collinson fears the 7.5% List 4A tariffs will increase to 25%, she said. “We also have a List 4B that has no tariffs on them right now. That could change as well." The Office of the U.S. Trade Representative didn’t comment.
“No seventh-inning stretch needed for this crowd!” tweeted Fox Sports Thursday, announcing the introduction of “virtual fans” for live MLB broadcasts, beginning Saturday. Fox collaborated with Pixotope software, Silver Spoon Animation and SMT to “deliver an elevated viewing experience,” said the network. Pixotope describes itself as an “open software-based solution” for creating virtual studios, augmented reality and on-air graphics. Silver Spoon is a Brooklyn, N.Y.-based studio specializing in motion-capture and virtual production services. SMT supplies “visual data intelligence” services for live sports broadcasts, including “virtual insertion.”
With Las Vegas so “dependent” on group and convention business, Rob Goldstein, Las Vegas Sands chief operating officer, sees “nothing that indicates” the business will “return at all” to the city this year, he said on a Q2 investor call Wednesday. “Las Vegas cannot perform without return of these segments. It cannot make money with limited hotel occupancy.” Even with the recent reopenings of the Venetian and Palazzo, “we’re running a regional casino” destination that’s “predicated” on customers driving in from other locales, he said. "Airlift" traffic through McCarran airport is only about 40% of its pre-COVID-19 volume, he said. “I don’t have a crystal ball into 2021,” said Goldstein. “I remain pessimistic" about the group and convention business for next year, he said. The “slowest return” will be the “large-deal group business” because it's “more tech-driven, and those people are more reluctant to travel,” he said. Goldstein doesn’t want to “predict 2021 because I don't feel I have enough insight into what might happen to the vaccine or the virus,” he said. “But I would be less than honest if I didn't tell you that Las Vegas is in a very difficult place." The city is "struggling here," said the COO. "It's painful, and I think it remains painful for the immediate future.” The stock closed 4.2% lower Thursday at $44.88. CES 2021 is scheduled Jan. 6-9 at the Las Vegas Convention Center.
The $38 million in Trade Act Section 301 tariff costs iRobot incurred in 2019 inflicted a hit of 3 percentage points on its gross margin for the year, said CEO Colin Angle. IRobot assumes the List 3 tariff exclusion that landed last month on the robotic vacuum cleaners it sources from China will expire at the end of 2020, he said. U.S. Trade Representative Robert Lighthizer “made it quite explicit” in congressional testimony last month that any granted List 3 exemptions “would expire at the end of the year,” said Angle Wednesday after quarterly results. The company’s “cash position” improved when it recently started receiving “cash payments associated with our tariff refunds” from the Trump administration, said Chief Financial Officer Julie Zeiler. “We anticipate receiving the $57 million in tariff-related refunds owed to us over the next 12 months.” IRobot is “continuing to push with all energy to drive the diversification of our manufacturing base,” said Angle. Delay in shifting production to Malaysia and bringing it to scale “has been one of the impacts of COVID-19,” he said. “There’s travel bans in place” that inhibit “sending people into Malaysia, which has created a delay,” he said. The company is trying to get that work “back on track,” he said. “We do believe that by the end of 2021, we’ll be in a situation where we are effectively geographically diversified and U.S.-China trade policy does not substantially affect our business anymore.” Europe is the region most reliant on brick-and-mortar, and stores were shuttered for much of the quarter, he said. Europe’s e-commerce infrastructure also is less “mature” and the system buckled under the weight of demand for essential products during the pandemic, he said. E-commerce revenue grew about 50% in Q2 from the year-ago quarter and was more than 70% of total quarterly revenue, said Angle. IRobot stock closed $79.35, down 7.49%.
Though Texas Instruments Q2 revenue of $3.2 billion was down 12% from a year earlier, it wasn't "the depth of the decline we saw in the 2008 financial crisis,” said Dave Pahl, head of investor relations, on a Tuesday evening earnings call. “We remain cautious on how the economy might behave over the next few years.” The main “weakness” was in automotive, down about 40% sequentially and from a year earlier, he said. “Excluding automotive, TI was up 8% sequentially and down 3% versus a year ago. The automotive market appears to have bottomed in May as North American and European assembly plants resumed operations.” TI’s personal electronics business was up more than 20% from Q1 and about 10% higher than the 2019 quarter, he said. “This can best be explained by work-from-home trends and TI being in a position to support unforecasted demand in the quarter.” Short lead times and high availability “are important capabilities that allow us to continue to support customers' near-term and unforecasted demand,” said Chief Financial Officer Rafael Lizardi. “Our product portfolio of mostly long-lived parts affords us to have a steady hand and therefore, we will take a similar approach to our factory operating plan again in third quarter.”
An executive walked gingerly around questions whether Snap's ad revenue is benefiting from the Facebook ad boycott. It’s "difficult to ascertain exactly what the impact of the Facebook boycott is on revenue,” said Chief Business Officer Jeremi Gorman on a Q2 call Tuesday. Gorman speculated some of Facebook’s lost ad revenue could be "related" to cuts in advertisers’ “overall content marketing budgets, just given the environment” of COVID-19. The Facebook hate-speech “conversation has opened the door for us” to “engage” with potential new advertisers, including with CEOs and chief marketing officers, he said. Facebook didn't comment Wednesday. The global health crisis “accelerated the shift to a more digital economy,” said Gorman. Snap’s advertisers “are exploring more ways to offer services digitally, including at-home fitness apps, online education programs, retail stores and restaurants offering online ordering and delivery services, and mobile-first banking and trading,” he said. The pandemic is encouraging business owners “to adopt digital marketing methods to engage with their customers globally,” said Gorman. Daily active users grew 17% year over year in Q2, with 238 million people using Snapchat “every day on average,” said CEO Evan Spiegel. Ad revenue grew 17% to $454 million, despite “extreme dislocations,” said Spiegel. As hard-hit industries like travel and theatrical entertainment “pull back spend,” he said, "we have transitioned to helping them plan for a future recovery led in part by our audience." Other industries like streaming and e-commerce that have thrived from “some of the COVID-related changes in consumer behavior” have been “leaning in as advertisers on our platform,” he said. “The path to this outcome was not a straight line,” said Chief Financial Officer Derek Andersen. “The operating environment has remained challenging as COVID-19 continues to impact macroeconomic conditions, and the businesses of our advertising clients." Advertisers hardest hit in the pandemic are those that “rely on in-person interaction with their customers” he said. The stock closed down 6.2% Wednesday at $23.20.