Intel Earnings Not as Bad as Guidance, but Some Caution Remains
Intel Corp. (NASDAQ: INTC) has managed to beat earnings, but the earnings guidance and some core metrics will be a disappointment. As a reminder, Intel had already guided the expectations ahead of today’s report. Its quarterly earnings came in at…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Operating income was $3.8 billion and net income of $3.0 billion in the quarter. The company generated approximately $5.1 billion in cash from operations. It used some $1.1 billion to pay dividends and it spent $1.2 billion to repurchase common stock. Gross margin was 63.3%, up 1.3 percentage points above the midpoint of the company’s updated expectation of 62 percent. Intel’s tax rate was 24% versus its prior expectation of 28%.
Guidance is a slight disappointment as revenue was put at $13.6 billion, plus or minus $500 million, versus a Thomson Reuters consensus of $13.78 billion. That is the key fourth quarter as well. Gross margin was put at 57% to 58% plus or minus a couple of percentage points in non-GAAP terms. The company’s effective tax rate is expected to be approximately 27%.
The company described the quarter as a “continuing tough economic environment” and talked about the world of computing in the midst of a period of breakthrough innovation and creativity. CEO Paul Otellini also said, “We’re pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market.”
Other comments were as follows:
- PC Client Group revenue was $8.6 billion, flat sequentially and down 8% from a year ago.
- Data Center Group revenue was $2.7 billion, down 5% sequentially and up 6% from a year ago.
- Other Intel architecture group revenue was $1.2 billion, up 6% sequentially and down 14% from a year ago.
Intel shares closed up 2.85% at $22.35 and shares have given back most of the gains as they are down almost 2% at $21.95. Intel’s 52-week range is $21.40 to $29.27 and analysts had a consensus price target of $29.71 ahead of today’s earnings report.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
