Boston, MA 10/16/2013 (wallstreetpr) – Let us compare Intel Corporation (NASDAQ:INTC)’s 3Q13 results to its earlier guidance and analysts expectations.
- Intel had forecasted revenues of $13.5 billion; analysts were expecting $13.47 billion. The company reported revenues of $13.483 billion. The company was able to match the analysts’ expectation though they could not achieve their own targets.
- Intel had predicted gross margins of 61%, the actual gross margins stood at 62.4%.
- R&D plus MG&A expenses were estimated at $4.8 billion, the actual spending were $4.712 billion. The reduction in these operating expenses was negated by $124 million in restructuring and asset impairment charges. These charges will have an effect in 4Q14 results as well.
- Equity investments and other income contributed to $420 million against estimates of $400 million.
- The tax rate was 24.82% against estimated 26%.
The results were more in line with the company’s expectations. Analysts are now looking at the increase in cash and short term investments. At the end of 2Q13, this was worth $17.35 billion and it increased by $1.8billion in 3Q13. As of now this pile stands at $19.15 billion. Out of the amount of $17.35 billion, $10.3 billion were located outside the U.S at the end of 2Q13. It was widely expected that Intel would reward the investors with a good dividend or buyback offer. However, Intel spent $536 million only on buybacks, this is less than $550 million it spent in 2Q12 and far less than $1.165 billion it spent a year ago. Investors will get impatient if Intel does not use these cash surpluses to reward them or to put the amount in funding some big acquisition.
The 4Q13 forecast by the company is essentially same as their 3Q13 forecast. The main points are:
- Revenues of $13.7 billion
- Gross margin percentage of 61%
- R&D plus MG&A expenses of $4.7 billion.
- Restructuring and asset impairment charges of $100 million.
- Tax rate of 25%
- Full year capital spending at $10.8 billion with a float of $300 million either ways.
The shares were trading at $23.39 at the close of trade on October 15, 2013.
