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Intel 2012 1Q financial analysis

Intel 2012 1Q results are slightly negative. Even if quarter revenue has increased from 12,9 bn.$ to 12,8 bn.$ but as can seen from chart below companies revenue shows decrease since it is not very influenced by seasonality at Q4. Net income before depreciation decreased from 4,6 bn.$ to 4,5 bn.$. This decrease could be driven by slowdown in worlds economy.

Companies main sales goes to Assia Pacific region. Since this region will continue to show largest growth that is a good news. Europe share is only 14% so Europe recession will not have that much impact on company. Company has lost some of its Ameriacas sales which has dropped compared to previous years 1Q. About 2/3 of companies revenue comes from PC area.

According to http://www.cpubenchmark.net Intel share in CPU market remains ~80% which is a good thing as company continues to hold on to its main market leader position and even growing it. In general companies results are slightly negative.

Companies Equity level remains strong 65%, but what is worrying is that its trend is stably going down as company is repurchasing its share quit aggressive, at Y2011 company repurchased its own stocks for over 12 bn.$ if adding ~4 bn.$ of paid dividends 16 bn.$ is almost all of companies generated Net income before depreciation ~18 bn.$ and is 133% from 12 bn.$ net income. This level is quit high. But 1Q alone showed slightly increase in equity level from 64,6% to 65,1% as company repurchased only 1,5 bn.$ of its shares. As now company has quit good balance and its shares price is quit normal at the market, such aggressive repurchase could be justifiable, but this must be watched over.

Other companies ratios are also good as equity is still in quite high level. Liquidity ratio is over 2. Cash and investments holds ~15 bn.$ which is ~1/5 of total companies asset. Inventory and account receivables turnover is around 30 days which is good. Companies investments into long term property (equipments, plants ect.) is ~3 bn.$/quarter which is good because this will bring profit in the future. In general companies balance structure is strong.

Share value:

Equity / share 46,8 bn.$  5,008 bn. 9,4 $/sh.
Market value 27,9 $ +18,5$ 5,1 years
Year Net income before Depreciation 17,9 bn.$ +3,6$/sh. 12,8%

 

Companies share basic value is ~9,4$.  Current market price is ~27,9$, which shows that market is paying ~18,5$ more or 5,1 years of Net income before Depreciation earnings  17,9 bn.$/year or 3,6$/share. Companies shares market evaluation is normal. Share profitability (Share market price/Net income before Depreciation) if not calculating goodwill write-off  is 12,8% which is quite good.

Company pays 0,225$/share/quarter dividend or ~3,2% dividend yield which is good, with dividend payout ratio ~25% which is also a good level. Company has increased its dividend payments up from 0,21$ to 0,225$ or by +8% compared to last year. Companies cash flow management can be considered as well balanced.

Analysis source: Intel 2012 1Q financial results

 

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3 Responses to Intel 2012 1Q financial analysis

  1. I enjoyed reading your take on Intel. I’ve read that flooding in Thailand affected computer sales due to a lack of hard drives. While it did affect results this quarter, it’s not supposed to be a problem longterm.

    CI

    • Good note, I will look trough such things when I will have more time. Such large companies will defiantly find their place in new markets as they are defiantly investing in new technologies.

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