Notice that most people compare the earning results across the same quarters, eg. Q3 here. However, I believe you have to be careful about it since Intel's 2009 financial performance is not at its normal range due to the financial crisis. So the forementioned 58% increase on EPS might not mean much.
Now I'll post some of my analysis on Intel's ER data, relevant market reaction, and financial ratio analysis. First, let's take a look at what analysts have viewed Intel.
The data are extracted from Yahoo Finance and you should be able to tell that I'm a big visual person:). The data in Yahoo Finance are most in table format and scattered so I set up a dashboard in Excel to pull the data in and demonstrate most of the text/tables in graphs. Hope you find them easier to read as well.There are six components for this dashboard: Earning history (estimate and actual EPS), Analyst action (downgraded, upgraded, etc), EPS for current quarter (how analyst's estimate changes), analyst's recommendations (normally I only view Strong buy as a buy suggestion), Sales (actual and estimate for next two quarters), and future growth estimation for the firm, industry, sector, and market (S&P500).
The takeaway for Intel's analyst corner information is that analysts are not very enthusiastic about the stock despite the earnings expectations are always met (mostly from better communication and expectation management of the IR dept, I think). And if you take a look at the future growth estimation part you won't like this industry much if you are trying to find a growth stock as the estimated growth rate is trending down.
Second, let's look at the past ER and market reaction for Intel. Again, Intel has beaten market expectation all the time as they provide and revise guidance as ER gets closer when they see material difference.The Pre-ER run checks the return before the ER day, such as for past 2 days, 5 days, and 30 days. Similarly, Post-ER run checks the post ER market returns for next 2 days, 5 days, and 30 days. I also put the market price for the stock during the past three month together with the ER-market reaction session to just get a sense of price movement. Another good complementary graph would be S&P500's same period price curve.
Finally let's get to the key parts: how did Intel perform during the last quarter? The financial ratio analyses are listed below.
Good thing about Intel here is really the profitability and steady growth of the sales despite the well recognized slow-down growth of PCs. The gross margin is still high which is what investors like to see. Well, let's take a look at other ratios.
what appears little bit concerning are some of the efficiency ratios and the working capital invested days.
AR turnover (account receivable) and Inventory turnover are showing signs of slowing down which caused longer period for capital to be stuck with the operations. But is it bad? Not really, it's obviously still in the manageable range.So no need to worry but it's worthwhile keeping an eye on.
In summary, Intel beats without surprise and keeps good operating results and maintain good financial health. However, even though they raise their guidance for next quarter I won't expect a big rally since investors just got what they expected and the stock is viewed as a mature and dividend stock. (After hour it traded over 2% but fell back to less than 1%)
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