Apple would possibly not have fared in addition to expected in its own Q4 , but just up the line in Silicon Valley Intel managed to exceed analyst predictions, posting record revenue of $14.3 billion — up $3.2 billion, or 29 percent year-over-year . The corporate also set new records for microprocessor units shipped, and expects further growth over the subsequent quarter, with laptop computer sales driving $14.7 billion in predicted Q4 revenue. Jump past the break for an in-depth study the company’s Q3, together with its outlook for the subsequent quarter.
$3.1 Billion Year-Over-Year Revenue Increase Fueled by Double-Digit PC Unit Growth and knowledge Center Strength
Buyback Authorization Increased by $10 Billion
Non-GAAP Results
Revenue: A record $14.3 billion, up $3.2 billion, 29 percent year-over-year
Gross margin: 64.4 percent, down 1.7 percentage points year-over-year
Operating income: A record $5.1 billion, up $895 million, 22 percent year-over-year
Net income: A record $3.7 billion, up $705 million, 24 percent year-over-year
EPS: A record 69 cents, up 17 cents, 33 percent year-over-year
GAAP Results
Revenue: A record $14.2 billion, up $3.1 billion, 28 percent year-over-year
Gross margin: 63.4 percent, down 2.6 percentage points year-over-year
Operating income: A record $4.8 billion, up $649 million, 16 percent year-over-year
Net income: A record $3.5 billion, up $513 million, 17 percent year-over-year
EPS: A record 65 cents, up 13 cents, 25 percent year-over-year
SANTA CLARA, Calif., Oct. 18, 2011 – Intel Corporation today reported third-quarter results, setting new records for microprocessor units shipped, EPS, earnings and revenue, which was up 28 percent year-over-year.
“Intel delivered record-setting results again in Q3, surpassing $14 billion in revenue for the 1st time, driven largely by double-digit unit growth in notebook PCs,” said Paul Otellini, Intel president and CEO. “We also saw continued strength inside the data center fueled by the continuing growth of mobile and cloud computing.”
On a Non-GAAP basis, revenue was $14.3 billion, operating income was $5.1 billion, net income was $3.7 billion and EPS was 69 cents. On a GAAP basis, the corporate reported third-quarter revenue of $14.2 billion, operating income of $4.8 billion, net income of $3.5 billion and EPS of 65 cents.
The corporate generated approximately $6.3 billion in cash from operations, paid cash dividends of $1.1 billion, and used $4.0 billion to repurchase 186 million shares of common stock. Intel’s board of directors also voted to extend the company’s buyback authorization by $10.0 billion, raising the whole unused balance to $14.2 billion on the end of the third quarter. The corporate also completed a senior notes offering of $5.0 billion primarily for the point of repurchasing stock.
Q3 2011 Key Financial Information (GAAP)
Business unit trends:
PC Client Group revenue of $9.4 billion, up 22 percent year-over-year.
Data Center Group revenue of $2.5 billion, up 15 percent year-over-year.
Other Intel® architecture group revenue up 68 percent year-over-year.
Intel® Atom™ microprocessor and chipset revenue of $269 million, down 32 percent year-over-year.
McAfee Inc. and Intel Mobile Communications contributed revenue of $1.1 billion.
The platform average selling price (ASP) was up year-over-year and flat sequentially.
Gross margin was 63.4 percent, 0.6 percent below the midpoint of the company’s expectation.
R&D plus MG&A spending was $4.2 billion, just under the company’s expectation.
Net gain of $107 million from equity investments and interest and other, in step with the company’s expectations of roughly $100 million.
The effective tax rate was 29 percent, above the company’s expectation of roughly 28 percent.
The corporate used $4.0 billion to repurchase 186 million shares of common stock.
Business Outlook
Intel’s Business Outlook doesn’t include the aptitude impact of any mergers, acquisitions, divestitures or other business combinations that can be completed after Oct. 18.
Q4 2011 (GAAP, unless otherwise stated)
Revenue: $14.7 billion, plus or minus $500 million, on both a GAAP and Non-GAAP basis.
Gross margin percentage: 65 percent, plus or minus a pair percentage points.
Non-GAAP gross margin percentage: 66 percent plus or minus a pair percentage points, excluding certain accounting impacts and expenses regarding acquisitions.
R&D plus MG&A spending: approximately $4.3 billion.
Amortization of acquisition-related intangibles: approximately $75 million.
Impact of equity investments and interest and other: a net lack of approximately $30 million.
Depreciation: approximately $1.4 billion.
Tax Rate: approximately 28 percent.
Full-year capital spending: $10.5 billion, plus or minus $300 million.
2011 can have 53 weeks of commercial versus the everyday 52 weeks.
For additional info regarding Intel’s results and Business Outlook, please see the CFO commentary at: www.intc.com/results.cfm.
Status of commercial Outlook
Intel’s Business Outlook is posted on intc.com and will be reiterated in public or private meetings with investors and others. The Business Outlook would be effective throughout the close of commercial Dec. 16 unless earlier updated; except that the Business Outlook for amortization of acquisition-related intangibles, impact of equity investments and interest and other, and tax rate, might be effective only during the close of commercial on Oct. 25. Intel’s Quiet Period will start from the close of industrial on Dec. 16 until publication of the company’s fourth-quarter earnings release, scheduled for Jan. 19, 2012. In the course of the Quiet Period, all the Business Outlook and other forward-looking statements disclosed within the company’s news releases and filings with the SEC must be regarded as historical, speaking as of ahead of the Quiet Period only, and never subject to an update by the corporate.
Risk Factors
The above statements and any others on this document that talk to plans and expectations for the fourth quarter, the year and the long run are forward-looking statements that involve plenty of risks and uncertainties. Words including “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “should” and their variations identify forward-looking statements. Statements that seek advice from or are in response to projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors may cause actual results to vary materially from those expressed in these forward-looking statements. Intel presently considers the next to be the $64000 factors which may cause actual results to vary materially from the company’s expectations.
Demand can be different from Intel’s expectations thanks to factors including changes in business and economic conditions, including supply constraints and other disruptions affecting customers; customer acceptance of Intel’s and competitors’ products; changes in customer order patterns including order cancellations; and changes inside the level of inventory at customers. Uncertainty in global economic and monetary conditions poses a risk that customers and businesses may defer purchases in line with negative financial events, that may negatively affect product demand and other related matters.
Intel operates in intensely competitive industries which are characterized by a high percentage of prices which are fixed or difficult to minimize inside the short term and product demand that’s highly variable and tough to forecast. Revenue and the gross margin percentage are tormented by the timing of Intel product introductions and the demand for and market acceptance of Intel’s products; actions taken by Intel’s competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel’s response to such actions; and Intel’s ability to reply quickly to technological developments and to include new features into its products.
Intel is inside the means of transitioning to its next generation of goods on 22nm process technology, and there may be execution and timing issues related to these changes, including products defects and errata and not up to anticipated manufacturing yields.
The gross margin percentage could vary significantly from expectations in response to capacity utilization; variations in inventory valuation, including variations involving the timing of qualifying products on the market; changes in revenue levels; product mix and pricing; the timing and execution of the producing ramp and associated costs; start-up costs; excess or obsolete inventory; changes in unit costs; defects or disruptions within the supply of fabrics or resources; product manufacturing quality/yields; and impairments of long-lived assets, including manufacturing, assembly/test and intangible assets.
Expenses, particularly certain marketing and compensation expenses, in addition restructuring and asset impairment charges, vary looking on the extent of demand for Intel’s products and the extent of revenue and profits.
The tax rate expectation relies on current tax law and current expected income. The tax rate could be suffering from the jurisdictions within which profits are determined to be earned and taxed; changes within the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the facility to comprehend deferred tax assets.
Gains or losses from equity securities and interest and other could vary from expectations counting on gains or losses at the sale, exchange, change within the fair value or impairments of debt and equity investments; rates of interest; cash balances; and changes in fair value of derivative instruments.
The vast majority of Intel’s non-marketable equity investment portfolio balance is targeted in companies within the flash memory market segment, and declines on this market segment or changes in management’s plans with respect to Intel’s investments on this market segment could end in significant impairment charges, impacting restructuring charges in addition to gains/losses on equity investments and interest and other.
Intel’s results may well be suffering from adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in foreign exchange rates.
Intel’s results can be stricken by the timing of closing of acquisitions and divestitures.
Intel’s results might be stricken by adverse effects related to product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust and other issues, which include the litigation and regulatory matters described in Intel’s SEC reports. An unfavorable ruling could include monetary damages or an injunction prohibiting us from manufacturing or selling a number of products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies resembling compulsory licensing of intellectual property.
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