Solid.
I’d say Intel’s (INTC) third quarter earnings report, released after the market close yesterday, October 12, is more likely to be greeted with a sigh of relief than a gasp of pleased surprise.
Earnings for the third quarter came to 52 cents a share. That’s 2 cents a share better than the Wall Street analyst consensus.
Revenue climbed to $11.1 billion, a gain of 18.2% from the third quarter of 2009, and slightly above the consensus expectations for $10.99 billion.
The all-important gross margins were 66%. That insignificantly lagged the consensus call for 66.1% and fell smack in the middle of the company’s own guidance of 65% to 67%. The average selling price for Intel’s chips was approximately flat with the second quarter. That’s good news for investors who were worried that slowing PC demand in the quarter would leave Intel selling proportionately more chips for notebooks and netbooks at lower margins.
In its own low-key way Intel signaled its excitement about its next generation Sandy Bridge processor, saying it was “particularly excited about our next-generation processor.”
I think that’s a good summary for the quarter. Solid. Nothing to scare investors out of the sector. But nothing that generates a feeling of “Got to buy tech stocks now” either.
Southof8,
I accept your apology and please do feel free to disagree anytime you actually know something about the subject being discussed and can add something of value. You didn’t hurt my feelings, you just irritated me with your ignorance. Of course I should have ignored you and that is my mistake. mea culpa.
This is kind of off-topic, but I read the other day that AAPL is now the second highest market cap of all stocks. To my mind, there’s something so, so, sooooo wrong with that. I mean really, wake up world! They make “here today, gone tomorrow” gadgets. There’s no way Apple is worth more than companies that make far more important products. Add to that their closed/proprietary stance towards everything they make, along with their high price, and that somebody’s going to beat them (like Android may already be doing) — well, it just makes no sense to me.
Somehow I’m reminded of when the AOL pizza delivery boy bought Time/Warner — it was just so wrong, yet the market bought into it for awhile. Now the pizza boy’s company thinks it ought to buy Yahoo? To quote Alec Guinness in “Bridge on the River Kwai”: “insanity”.
Taz, I beg your pardon for having the gall to disagree with you. I’ll make sure I never do it again, lest I hurt your feelings.
My gripe was not with Intel the company, but with Intel the stock. Intel is not about to go out of business, but can’t they do something to inspire investors, bring something exciting to the market to challenge Apple… it would be nice.
southof8,
For goodness sake give me a little credit for not being an idiot. I don’t remember saying to buy Intel a decade ago. I think I said buy it yesterday, lol. If you cannot understand why I think Intel is a value play that is fine. Perhaps you don’t know what that really means and I apologize for using such difficult jargon. You clearly have limited knowledge about Intel or Apple as the other posters have ably pointed out. Dad always told me if I know little about a subject best keep my mouth shut rather than open it up and remove all doubt. Words to live by.
I’m with Jim – Intel is a worthy long (dividend) and medium (Jubak Picks) pick, at least until CPUs cease being the key to a system. Intel can take over any sector they want, either by incremental improvements to technology or buying out specific niches. Intel’s weakness these days is a product of falling out of favor with growth funds, while dividend/value investors are just starting to see Intel as a dividend/value play. Jim is a bit ahead of the game here, I’d say.
The time when everybody gives up on a good stock is the time to buy it. I bought more Intel today.
Intel chips are in Mac laptops and desktops, but not in iPad. That is the biggest question mark for Intel. If they can work magic and shrink x86 into a platform that can run well on tablets and/or phones the market would jump on it as most software is already written for x86 and having to port it is costly. If they ever get that one problem worked out with a tiny bit of traction they will take off in the mobile space which right now they really have none of.
I, for one, would not bet against them.
Wish I could maintain my enthusiasm. INTC was beaten up after last earning report and is pushed lower again today. I really have to give up on this company. All the numbers/ratios indicate that it is a steal – but nothing seems to work for it.
South,
Don’t forget that all of the mac laptops (i believe) now run on Intel chips. My Mac Pro is solid and Ipads use an apple chip. Intel is still the heart and soul of the computer industry and that isn’t changing anytime soon.
Taz,
I appreciate the enthusiasm. But you might want to compare total returns in apple and intel over the last month, year, decade, etc. There is no comparison. If you own both than you know that better than most. To say apple is momentum and intel is value is absurd Intel primarily makes parts for PCs, and people are trading in PCs for macs and Ipads by the boatload.
greedi,
Intel sure doesn’t look great today to be sure but that is only a sign of hot money taking the short term gain in INTC and moving to the next target in earnings season. Looks like it is CSCO. A little patience is in order. I didn’t suggest INTC for a one day romance. If you could only buy one thing then APPL was of course a better bet lately and may still be but it is not really the same animal. Intel is value with a dividend. Apple is momentum. I like them both and own them both for different reasons. I confess I took a little profit in APPL today since I do hate to roundtrip but I am also keeping some. Best of luck!
I don’t know a whole lot about investing, but I do know that on a day when almost every stock is going up, when a certain stock does not participate, that’s not a good sign — and Intel is not participating. Also Tazman when you say a history of innovation, OK but I guess investors need to see some innovation to get on board. For me, I wish I picked Apple this tech season.
With a dividend over 3%, a nice cash pile, and a pe of around 10 it is hard not to jump all over Intel stock. Today it is off after another good earnings report so investors have been given another nice opening. Yes the analysts can come up with a lot of potential obstacles but Intel has a long track record of innovation that I wouldn’t bet against. MSFT is also going to provide a nice overall return. I really hate MSFT, especially Ballmer, but I will overlook that for the moment, lol. Now, if Ballmer were to step aside look out above!
Off Topic… Another reason to stay away from banks: http://dealbook.blogs.nytimes.com/2010/10/13/robo-signers-wanted-no-mortgage-experience-needed/
“In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage-servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.
In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit,” The Associated Press reported. Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.
“The mortgage servicers hired people who would never question authority,” said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them — earning them the name “robo-signers.”
The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.”
Seems like a lot more enthusiasm for an Apple or Google over the past month than for Intel, Jim.