Intel Delivers on Earnings, Higher Guidance and Higher Stock Buybacks

IntelIntel Corporation (NASDAQ: INTC) had already guided revenues higher for its second quarter, and now we have the final earnings report. The semiconductor and processor giant reported earnings of $0.55 per share on revenue of $13.8 billion. The Thomson Reuters estimates were $0.52 EPS and $13.69 billion in revenue. has sent us updated information on Intel’s expected earnings with a whisper number of $0.55 and a whisper range of $0.52 to $0.60 per share.

Intel said that its gross margin was 64.5% in this last quarter. Operating income was $3.8 billion, and net income was $2.8 billion.

As far as guidance, Intel sees the coming quarterly revenue of $14.4 billion, plus or minus $500 million. Next quarter’s consensus estimates are $0.56 EPS and $14.02 billion in revenue. Intel is also target full 2014 revenue growth of 5%, while the consensus estimate of $54.55 billion would have implied revenue growth of 3.5%.

Another boost is coming from a higher forecasted return of capital to shareholders. Intel has returned almost $90 billion to shareholders through dividends and share repurchases, and now it is planning to lower its cash balance further through increased share repurchases with an authorized increase of $20 billion to its share repurchase. Intel now expects to repurchase approximately $4 billion in the third quarter, and also said it will have additional share repurchases in the fourth quarter.

Intel now breaks out its unit-by-unit data. It continues to make zero headway in mobile and communications. The firm showed the following data:

  • PC Client Group revenue of $8.7 billion, up 9 percent sequentially and up 6 percent year-over-year.
  • Data Center Group revenue of $3.5 billion, up 14 percent sequentially and up 19 percent year-over-year.
  • Internet of Things Group revenue of $539 million, up 12 percent sequentially and up 24 percent year-over-year.
  • Mobile and Communications Group revenue of $51 million, down 67 percent sequentially and down 83 percent year-over-year.
  • Software and services operating segments revenue of $548 million, down 1 percent sequentially and up 3 percent year-over-year.

While we are among those who remain disappointed that Intel  is lacking in mobile and communications, some other relative gains may be taking place to offset this. CEO Brian Krzanich said,

“With the ramp of our Baytrail SoC family, we have expanded into new segments such as Chrome-based systems, and we are on track to meet our 40 million unit tablet goal. In addition, we hit an important qualification milestone for our upcoming 14nm Broadwell product, and expect the first systems to be on shelves during the holidays.”

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Intel’s pre-earnings close was at $31.71, and the 52-week range was $21.89 to $31.80 (high hit on the same day). The consensus analyst price target was down at $29.96. Coming into this week, Intel’s stock price was up almost 12% in the last month alone. it was also up over 22% so far in 2014 ahead of the report.

Intel shares were indicated up over 3% at $32.75 in the initial after-hours reaction to earnings.

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