Today, Intel released their earnings report for Q1 2010 or the period ending March 27th 2010. Intel was expected to report earnings of 38 cents a share on revenue of $9.8 billion. Instead, they reported earnings of 43 cents a share on revenue of $10.3 billion. Not only meeting analyst expectations, but also surpassing earnings expectations by nearly 12% and revenue by 5%. These figures do not even begin to describe the overall growth that Intel has afforded over previous quarters.
Compared to last quarter, Q4 09, Intel has actually decreased in revenue as many analysts had expected. The surprising fact is that they actually managed to lose only about 3% of revenue in Q1 10 over Q4 09. For most companies, this could be a negative figure except for the fact that most analysts had expected a 7% drop in revenue which means that Intel had beaten analysts’ projections. In addition to that, Intel has managed to increase operating income by 38% over Q4 09. This huge growth in operating income of $3.4 Billion is a direct result of mobile microprocessor revenue setting records in revenue as well as a higher ASP across the board. In addition to that, Intel has also managed to increase their net income by 7% over Q4 09 and increased their EPS or earnings per share by 3 cents.
While these numbers and expectations appear to be quite good and shiny, we must also look at the fact that in Q4 09 Intel made a one time payment to AMD of $1.25 Billion as part of a settlement. If one were to factor this in to the earnings report for Q4 09 and use Intel’s non-GAAP financial comparison, we would find that the $1.25 Billion severely impacted Intel’s balance sheet for Q4 09 and that Q1 10 is actually a down quarter from Q4 09. If we look at Intel’s Q1 2010 highlights without knowing the outcome of their GAAP earnings report, we see either flat or revenue decreases with very little increase in ASP. This, in most cases, would result in a somewhat lackluster quarter as many analysts may have expected. In any case, Intel did manage to surpass expectations even though the $1.25 Billion settlement did muddy Intel’s true earnings for Q4 09 which does create an odd perspective looking backwards from Q1 10. For example, when comparing Q1 10 to Q4 09 using Intel’s non-GAAP which factors out the $1.25 settlement we notice that Intel is actually down across the board. Following these figures, Intel’s operating income would actually be down 8% from Q4 09 to Q1 10 instead of up 38%. Also, during that same period Intel would have reported a decrease of net income of 21% and an EPS down 12 cents. This reflects that perhaps Q1 10 may not appear as fantastic as it does using GAAP and that the settlement with AMD may have actually been beneficial to Intel for many reasons including to possibly make their financial figures appear better for the next quarter even though, traditionally, the first quarter is never as good as the fourth quarter.
Either way, comparing the similar quarter ending March 28th in 2009 to 2010 we see huge improvements across the board. These figures are a great indication of Intel’s improvement over the past year even when considering things like the $1.25 Billion settlement with AMD. Intel was up 44% in revenue last quarter over that same quarter a year ago, granted that Q1 2009 was part of the height of the recession when many tech companies took their biggest hits. When we look at these figures, we also see that Intel managed to increase operating income by 433% over Q1 09 and net income by 288%. These gigantic numbers are simply an indication of how bad things really were for Intel back then and how much they’ve recovered since then. Finally, when comparing Intel’s earnings for Q1 10 to Q1 09 we notice an EPS of 32 cents which is a reflection of the company’s overall recovery of earnings and is similar in magnitude to the increases of operating income and net income.
In the end, this earnings report is a mixed bag of good and bad even though the stock market appears to have received it well.
Discuss this in our forums here.
Original Author: Anshel Sag
Webmaster’s note: This news article is part of our extensive Archive on gadget news that have been happening in the past 10 years. For up to date stuff we would recommend a visit to our homepage. Additionally, we take great pride in our user manual section, as well as our VPN Troubleshooting guide, so be sure to check them out as well.
