Intel Ba-byyyy!

October 14, 2008 at 1:58 pm  ·  Category: Fundamental Analysis, Market Commentary, Stocks

Intel (INTC) kicked off 3rd quarter tech earnings after the close today and they did it in style (INTC 3Q Earnings Release).

They reported EPS of 35 cents a share compared to estimates of 34 cents and revenue of $10.22 billion compared to estimates of $10.26 billion. 

They didn’t miss!  This is pretty much in line with analyst estimates.  And in line right now is bullish.

Everybody was wondering what the outlook would be.  They pretty much dodged the issue by forecasting a really wide range for 4th quarter revenues ($10.1-$10.9 bil) and announcing a mid-quarter update for Dec. 4.  CEO Paul Otellini said: “As we look to Q4, it is hard to know what impact the financial crisis will have on end customer demand.” 

Beautiful!  You don’t need to come out and spook the market with some scary forecast in this environment.  I like it.

The only weak spot I saw was that Revenue – Americas was down 9% from the year ago period.  It’s hard out here in the old USSA, if you haven’t noticed.

Intel shares were off 6% to $15.93 during the day’s session but are trading up 5-6% in the after hours.

This sets a good tone for tomorrow.

*****

Plus, the stock is CHEAP at these levels. 

They have $1.80 of net cash and short term investments per share on their balance sheet so you get the business for $14.  They’ve earned 87 cents per share YTD and should earn something like $1.25 for the full year.  That means you get Intel for 11 times 2008 EPS

This is the premiere semiconductor company, with $10 billion of net cash on their balance sheet, that pretty much mints money quarter after quarter after quarter, year after year after year.  Not only that but they pay a 56 cent per share annual dividend for a 3.5% dividend yield

That’s value right there.

Disclosure: Top Gun has no position in Intel (INTC) shares.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 

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