Intel bids to mask mobile losses with new reporting structure
Intel Corp. has announced a change to the way it reports its quarterly earnings in an all-too-obvious effort to mask the poor performance of its Mobile and Communications division.
The chip maker unveiled its new financial reporting structure on Monday, saying it plans to combine its Mobile and Communications group with its PC Client division, making a brand new segment called Client Computing. Intel has reportedly been planning such a move for some time – its CEO Brian Krzanich first notified employees of the change back in November 2014, according to a leaked memo that showed up in the Wall Street Journal.
According to a press release from Intel on Monday, the reorganization is meant to “address all aspects of the client computing market segment and utilize Intel’s intellectual property to offer compelling customer solutions.” That might be so, but it also helps to mask the shockingly poor numbers its Mobile and Communications division has been churning out – it’s losing around $1 billion a quarter – instead lumping them together with its PC division that accounts for the vast majority of its sales.
Asked by VentureBeat if this was the company’s real intention, Intel spokesperson Cara Walker said it was not the case. Instead, she said it was an “accounting change” that was necessary to mirror corporate organizational moves within the company.
“We previously had two organizations selling solutions into organizations, and now that will be one,” said Walker.
To back up this statement, Intel has said it will continue to offer ‘commentary’ on its mobile product’s performance, whatever that means. It’ll be interesting to see how forthcoming Intel really is – last November it said it was planning to boost profitability in the sector by $800 million this year, but that would still leave it in a deficit, considering it’s currently losing $1 billion a quarter.
The new Client Computing group will still be massively profitable though, even with the mobile unit sucking dollars out of it. It’s old PC Client group raked in an enormous $14.6 billion in revenues through 2014, which means that it would still have shown profits of around $10.46 billion had Mobile and Communications’ 2014 losses been taken into account.
Intel said that its other business segments, including its Data Center, Software and Services, Other, and the Internet of Things groups, would all remain unchanged.
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