Intel CEO on Earnings, Windows 7

" This is a huge week for the personal computer industry Microsoft launches its new windows seven operating system on Thursday."

" Avenue windows is expected helped sales of desktop PCs and that means chipmaker Intel fresh off as sterling earnings report. We are joined now in a first on fox -- Intel's CEO. Paul auto -- is good to see in person Paul thanks for being here you walk -- studio -- this first of have been here you don't like the house that Rupert bill. Now last week. Unbelievable third quarter earnings and what impressed most people was. It was top line earnings growth and -- been so many people have come up with positive earnings based on firing people and cutting costs this was based on. Increased sales and it really sparked what we see now now the market is a 10100. That's what kind of sport that market rally last week. But expectations. Are so high -- for you to increase computer -- do you think expectations are too high now. I don't think so actually that if there were too high the stock cover would have gone up after the earnings is supposed to stay flat or down a little. I think there's a lot of concern about. It is is the peak. In terms of our our earnings capability and we -- don't think so but in terms of Ross sales. The data is that this year will be building more personal computer units sold them last year when it was and he suggested it might be as high as 10% no I set I set up a couple of 4% okay -- this year but did you know that will the year started out down 10% and and the shows the resilience of technology I just want to make its. Because it has been -- reported that you do it has been reported elsewhere. This is and AP story that -- 2010 could see PC units increased 10% or more 2010. I don't Austin and on nine versus Norway so the doors of the recession year versus the -- you stick by 2010 we didn't make a forecast for for 2010 that's probably Gartner someone but I wouldn't argue with that number -- our traditionally the units have grown about. Not ten -- 11% a year in boom years it can be if twice that in in and bust years it's you know low. It's 670% kind of numbers figure god."

" This was also really good for Q4 very strong about ten point one billion versus what people talk about the whisper number of about not going to happen nine point five billion. What is it that's driving miss compared to want to say three quarters ago to three quarters ago as a tougher atmosphere."

" It was what we call the bottom February you enough room for the but. We thought things of that trough doubt and we're we're going to improve. And -- going to the same thing all your two things the consumer is buying worldwide consumers are buying notebooks and netbooks. And China has been very strong hauling along here in the US the consumer civil servant very good to back to school season was was was extraordinary. And I think there's a lot of anticipation for of this selling season for the holiday you know he's injured child back to school college -- killed a teenager. They're going to need a -- think that you really can't do their there they're education without it anymore and that drives demand. And then there is windows seven Kansas worked for years now for at least five years a lot of businesses said. Now we we we can put off upgrading because frankly we're not too impressed by this and some other products. But windows seven may really change all that how do you think you will and Howard U at Intel changing your strategy because of that I think there's there's three things coming the other one is and one is it's been a long time since people on credit so. Most corporations are using experience almost ten years now. The second thing is that the generation hardware that people have in their shops today is very old -- fleet is old. Averaged just -- his five years old aboriginal focused for years old and is there out of warranty. So that they're costing corporations more to keep them to buy a new one. And then when you buy and when you get to new software gets new security features I think all that leads to pent up demand particularly if you get CFOs now seeing the light at the end of the tunnel in terms of the business improving for 30 seconds start the refresh cycle."

" And let's ask about the situation right now that popped up late last week and this -- this insider trading scandal gallium holdings where the man who was running it. Have moles inside companies Intel among them where a member of working your Treasury Department as I understand it. Has been arrested now this is a gallon founder but a guy named Reggie goal is an executive at Intel. When you heard about this what was your first thought."

" first I was -- Rajiv goal. I'd never heard this guy's -- he's he's he's a fairly low level guy in our I think he's in our I -- offer and venture capital arm was just assigned to the assigned to treasury. The allegations are that he leaks and information back in 2006 about our earnings and about. The Clearwater transaction he's a live that I mean this is an employee I'm sure New Hampshire the capture him and that we we have a zero tolerance policy on the you can imagine. But people are people and I think people attempt about a I don't want to judge him visit is it is it hasn't been -- abilities and I think he's just been charged. But if this is true that's he's out. That the continent a new place to make a living are you now working with the either the SEC your other federal officials to try to screen other people that might have help us the inside -- Not not to my knowledge and to trials have not requested -- the thing they didn't notice to us early on as is that this suspect 2006. So they were probably. Watching things for a long period of time which I would expect them to do when you have -- insider trading somewhere. But to my knowledge they didn't ask our cooperation of course it's a houseful. But are you doing any sort of internal checks to make sure that nobody else might have been really nothing you can do except him in this let's proving you can't prove the negative vision now. Seeking god and reinforced what our policies our men and and I think that that you know anyone that might have been thinking about it probably enough thinking about it today -- of seeing that. Along -- justice can reach out like that are."

" You know you guys have so much growth that you're doing on any given day so I'm sure if this is. Tempting for anybody who wants to do well on the stuff but the stock has done extraordinarily well since the first of the year end when it was hitting its lows during a recession. Let's talk about -- The global picture but more importantly perhaps here in the US economy you know are we doing enough. From your perspective for job creation and we always want to get. The private company publicly traded but sort of the private -- view them on how we could generate jobs because the unemployment rate looks like it's ticked up up up."

" Yep well the government doesn't generate jobs private sector doesn't you know and and the good news is the administration's concern about the -- is asking business leaders what do you think. Soledad I've been asked this question by the administration and given the same answer what that'll give you -- take the uncertainty out. Businesses hate uncertainty and if you don't know what the tax rates going to be picture if you don't know if we can repatriate money or not repatriate money if you don't know if -- RD tax credit. Once again next year or not. That changes your investment decisions and you -- things like aren't you make over. 510 year periods in terms of the investments to not know the other credit it is a very difficult thing to do because you're talking about a significant. Incentives -- disincentives that doesn't happen. So take the variability out give your business system give business a clear view of taxation. Health care costs. It. It can can you get H one B visas for you for the employees who want to hire those kinds of things and then we can make their own decisions. At the end of the day ending recessions is about confidence. Build rebuilding confidence is not about a different structure in the banks from I think it to people have confidence that the economy is going to be better tomorrow than today. That'll start happening GDP improves and I think people expand if you take that -- ability."

" confidence is coming back we see it on the market 10112. Was what the Dow is -- right now by consumer confidence consumer companies but are you getting that that sense of stability on the part of the government because over the past you're not just the Obama administration going back to back to went all the started. Back in the fall last year there's been this sort of panic mode. For which there is no advanced planning to get the sense of people have have put the panic behind them and they are now trying to plan."

" Those folks inside about what I I think so and I've published as have most illustrative of its heart it's easy to go back and play Monday Morning Quarterback on this one. In the fourth quarter of last year no one knew what the bottom we were all scared about what the whole system collapsed. And and you can argue whether too much was spent her two little was spent on -- and things like that the net result is we survived the the system survived. And at the end of the day. That will turn out to be I think a small investment for putting the stability into the system the time it -- and it wasn't just the United States we help stabilize the entire world."

" We'll -- our actions health care you run a huge company. Do you feel that a public option a government option thrown into the private insurance mixes is a good way to go will cost you more will cost you less."

" Don't know enough about it. At at face value I don't think it would help our employees are placed at a fairly good health package today that a lot of choice today. I would be afraid of any options that took away that choice which is what I would fear that a a public -- option would do overtime despite by virtue of its position. So in that sense I would like that there are some issues about the Simpson. Opportunities like the baucus bill on exchanges themselves that are interesting movement want to look at those but we are useless to control over own destiny on the stuff. So we've put in a wellness plan the last three years that allowed us to attenuated the growth of health care cost the United States until the -- per employee. Without putting the additional cost on the backs of the employee. Despite getting people to focus on their own wellness on a diet plans prevent exactly and I got to ask you the other trillion dollar plan in the works cap and trade. Where do you stand on that. I don't think I like what's being proposed a -- one version of it which is out of Campbell's office. It doesn't I think take into account the fact that people build things for a global basis and you have global competition. And I don't know how you can effectively build a trader was so what that becomes. And other cut and people who import. Things that may come from other countries that don't have an energy tax how that works councils is either has to be done on a global basis. Or have a level playing field to Ottawa otherwise all you're doing is you're moving the pollution. And you and you make in the US less competitive. And Paul Otellini right as a CEO of Intel coming here first on Fox Business our thanks to we appreciate it welcome one question I've always want to ask did you want to be a priest. Her brother took that job. And one in the family up I called great."