Intel Earnings Not as Bad as Guidance, but Some Caution Remains

Before you go, we thought you'd like these...
Before you go close icon

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 $0.58 EPS and revenue was $13.5 billion. Thomson Reuters had estimates of $0.53 EPS and $13.62 billion in revenue.

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

Read Full Story

Markets

S&P 500 2,387.45 -1.16 -0.05%
DJIA 20,975.09 -21.03 -0.10%
NASDAQ 6,025.23 -0.27 0.00%
DAX 12,441.01 -31.79 -0.25%
NIKKEI 225 19,251.87 -37.56 -0.19%
HANG SENG 24,698.48 120.05 0.49%
USD (per EUR) 1.09 0.00 -0.11%
USD (per CHF) 0.99 0.00 0.07%
JPY (per USD) 111.27 0.08 0.08%
GBP (per USD) 1.29 0.01 0.41%

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Nature Gets Revenge On Safari Hunter Who Killed Elephants And Lions For Sport Nature Gets Revenge On Safari Hunter Who Killed Elephants And Lions For Sport
Man Is Horrified To Learn His Biological Father's Identity - But A Look In The Mirror Man Is Horrified To Learn His Biological Father's Identity - But A Look In The Mirror
12 Facts That Will Make You Smarter Than Your Friends 12 Facts That Will Make You Smarter Than Your Friends