CEOs Discuss the PC Market: Microsoft, Intel, AMD, Logitech, Symantec

Quotes from CEOs and CFOs on recent earnings conference calls, discussing their companies and markets:

Microsoft CFO Chris Liddell and IR Director Colleen Healy

Looking at our second quarter financial performance, revenue grew 6%. If you were to exclude the $1.6 billion revenue deferral associated predominately with our technology guarantee program for Windows and Office, our revenue growth would have been 20%. That is impressive growth for any company, let alone one of our size.

Business customer demand for our server and tools and Microsoft business division products was healthy across major geographies in both our large and small customer segments. Looking specifically at sales in December, we saw encouraging signs of early demand for the 2007 Microsoft Office system, Exchange Server 2007 and Windows Vista.

Retail demand during the holiday quarter was robust for consumer PCs as well as for Xbox 360 consoles and games, helping to push revenue for both client and entertainment and devices to the upper end of our quarterly guidance.

Operating income benefited from both the strong revenue as well as lower spending, primarily on marketing programs, most of which shifted out of quarter 2 and into the rest of the year. The operating income results flowed through the P&L and drove EPS numbers that came in $0.02 to $0.04 above what we told you in October...

Healthy growth in the hardware market was a key contributor to the results for the quarter. We estimate the PC market grew faster than we expected at 8% to 10% during the quarter. This growth is particularly strong, considering the upcoming consumer launch of Windows Vista, illustrating the success of our Tech Guarantee Program, as well as the continuing value proposition of Windows XP.

Consumer PC shipment growth once again outpaced business shipments, driven by a strong holiday sales season. From a form factor perspective, growth in notebook PC shipments continues to outpace that of desktops. PC unit growth continues to be led by the emerging markets. Asia, excluding Japan, and Latin America maintained double-digit growth rates, while the remaining regions grew at single digits. Server hardware shipment growth remained consistent with our full year estimate of 10% to 12%.

• Excerpted from the full Microsoft conference call transcript.

Intel CFO Andy Bryant

Revenue for the fourth quarter was $9.7 billion, at the top of the range we forecast in October, and up 11% from the third quarter. The growth came from higher average selling prices and unit volumes of microprocessors and from higher revenue from Flash memory.

As was the case in the third quarter, the server business led the percentage growth in revenue with higher units and higher average selling prices. The mobility group led the dollar growth, with higher revenue for microprocessors, wireless and chipsets.

Microprocessor revenue in the digital enterprise group of $3.9 billion grew 9%, its strongest sequential growth rate in eight quarters. The mobility group achieved growth in microprocessors of 19%, its best sequential growth in over eight quarters.

Revenue from chipsets, motherboards, and other products in the digital enterprise group was $1.3 billion, down 8% from the third quarter, while revenue for chipsets and other products in the mobility group was $925 million, up 14%.

In a year-to-year comparison, quarterly revenue was down approximately 5%. Lower revenue in digital enterprise group more than offset growth in the mobility group. Among the geographies, the only year-to-year revenue growth came from the Americas region.

• Excerpted from the full Intel conference call transcript.

AMD CEO Hector J. Ruiz

The demand for our technology is greater than our current share of the business, and largely the limiting factor has been the monopoly behavior that’s been abusive by our competitor. Our customers want us to win and increase the share of their business. They like choice and demand more choice, and they want us to have the capacity to offer that choice and continue to offer the kind of innovation that we have provided, and of course, to help drive growth.

They are demanding that we fight for share, and we will. We will continue to expand our capacity in response to this customer need.

The interesting thing that in doing these things that I just talked about, we have actually forced the competition to become more efficient. But in doing so, it makes us realize that we have to raise our own efficiency to a higher level, so we are focusing a flawless execution on completing our 65-nanometer transition by this summer, and we’re looking at accelerating 45-nanometer and closing the gap with our competitor.

We will carefully manage costs, but we also believe that we’re going to have to tweak our business model because we believe we have to achieve prosperity in an environment where pricing competition is going to be tougher than perhaps we had originally planned.

We will do whatever it takes to continue on our path to deliver customer-centric innovation this year and beyond.

• Excerpted from the full AMD conference call transcript.

Logitech CEO Mark Hawkins

It was our best quarter ever for the cordless mice with sales growth of 19% and unit growth of 10%. We're very pleased about this. The growth in Q3 was primarily driven by the demand for our MX Revolution cordless laser mouse and the VX Revolution cordless laser mouse for notebooks. We also saw continued strength in our notebook category and I really want to underscore this. A lot of people ask me questions about the notebook form factor. We're really pleased when we see our sales of cordless mice growing for notebooks by 67% with units up by 42%.

• Excerpted from the full Logitech conference call transcript.

Symantec CEO John Thompson

The consumer business grew 24% year over year and was the bright spot for the December quarter. Normalized for the ratable model change last year, this segment grew 19% year over year. Growth in this segment continues to be driven by our electronic distribution channels, new sales and marketing initiatives as well as new product launches.

With Microsoft's entry into the consumer security market, our objectives were to out-innovate them and improve the quality of every customer interaction with Symantec. On the innovation front, the fruits of our efforts are reflected in the numerous accolades that our 2007 versions of both Norton Internet Security and Norton Antivirus continue to receive around the globe. We continue to leverage our many years of security expertise to distance ourselves from both new and old competitors. We also continue to receive positive feedback on Norton Confidential, a new category-defining product for consumer transaction security; and the beta version of Norton 360 as well. Norton 360 is expected to launch by the end of March and we are already prepared to ship our Vista versions.

• Excerpted from the full Symantech conference call transcript.