Boston, MA 01/17/2013 (wallstreetpr) – Intel Corporation (NASDAQ:INTC) said that its net income surged by 6.4 percent in the trading period ended December. Revenue for the same duration rose 2.6 percent. The company also managed to report gross profit margin uptick of 62 percent against the projection of 61 percent. A causal look at these numbers may indicate that the company performed nicely. However, there is more than makes Q4 a disappointment and concern for investors.
Were Fourth Quarter results a beat?
Intel Corporation (NASDAQ:INTC) reported earning revenue of $13.8 billion which exceeded the $13.7 billion that analysts expected. Note however that Intel was initially expected to post revenue of $14.02 billion for the quarter and what happened was that top-line expectations were lowered after the company adjusted its guidance for Q4 to $13.7 billion which was the midpoint of the earlier issued revenue range.
With that in mind, it is easy to see that Intel set lower goals than was otherwise desired. Perhaps on a realistic figure Intel Corporation (NASDAQ:INTC) should have attained $13.9 on revenue.
The company’s EPS would have been better than what it reported. The miss in this column was contributed to by more than expected spending on research and development as well as merger and acquisition expenses. The company was expected to spend about $4.7 billion for these activities but ended up spending $4.8 billion. Moreover, restructuring expenses also hit $116 million, way above the $100 million that was guided for the quarter.
Yet another reason Intel Corporation (NASDAQ:INTC) suffered on EPS was that it suffered a burn of $38 million due to higher tax rate that came in at 20.08 percent while the company had guided 25 percent. Shares dilution was another reason the company missed on positing a strong EPS.
Give it to the company on gross margins. This was a clear beat that it ended up hitting 62 percent, a solid percentage ahead of expectations.
Way forward
We cannot change what Intel Corporation (NASDAQ:INTC) has already reported. However, we can expect the company to perform better in Q1 if it increases its share buyback program, limit expenses and succeeds in its foray into tablets and smartphone market.
