INTC reported a very strong number and raised guidance for the third quarter. For the quarter just ended, the company posted earnings per share of 51 cents on revenue of $10.8 billion. Gross margins came in at 67%. The company guided third-quarter revenue to a range of $11.2 billion to $12 billion (the Street consensus was at $10.9 billion). The company also guided gross margins to 67%, plus or minus "a couple of percentage points."
By my rough math, it looks like third-quarter EPS estimates should move to about 55 cents, whereas the Street has been projecting 48 cents.
Other highlights:
* Demand was strong across all channels and product lines.
* The company said it is "very comfortable" with the level of inventory across the channel.
* The PC and server segments are healthy. This matches what ORCL said just a week ago about its new hardware business.
* The company says it can react very quickly to any slowdown in demand.
* Europe appears to be doing well, but the company is watching billings for any hint of slowing.
Overall, it was the best quarter in Intel's history. Yes, the BEST in its history. The recovery remains strong, and the company is doing an excellent job managing the cost structure. I don't want to a cynic in light of such great numbers, but I am starting to wonder how much better the margin outlook can get. Can Intel really do 70% gross margins? Maybe it can in a perfect scenario with a robust economic recovery and upgrade cycle.
long INTC
No comments:
Post a Comment