Intel: Q3 Earnings Right on Target

by: Greg Feirman October 15, 2008 | about stocks: INTC    

Greg Feirman

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Intel (INTC) kicked off third quarter tech earnings after the close on Tuesday and the company did it in style (INTC Q3 Earnings Release).

The company reported EPS of $0.35 a share compared to estimates of $0.34 and revenue of $10.22 billion compared to estimates of $10.26 billion. 

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

Everybody was wondering what the outlook would be.  The company pretty much dodged the issue by forecasting a really wide range for fourth quarter revenues ($10.1-$10.9B) and announced 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.  If you haven’t noticed, it’s hard out here in the old USA.

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

This sets a good tone for today.

*****

The stock is SO CHEAP at these levels. 

The company has $1.80 of net cash and short-term investments per share on its balance sheet so you get the business for $14.  It has earned $0.87 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, which pretty much mints money quarter after quarter after quarter, year after year after year.  Not only that, but it pays a $0.56 per share annual dividend for a 3.5% dividend yield. 

That’s value right there.

Disclosure: Top Gun has no position in Intel shares.

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