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
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