The Price of Intel's War: Fool by Numbers

On July 19, Motley Fool Inside Value selection Intel (Nasdaq: INTC  ) released Q2 2006 earnings for the period ended July 1. Here's the story ... the numbers are below.

  • Sales considerably lagged estimates, thanks to a price war and aggressive competition from Advanced Micro Devices (NYSE: AMD  ) . Meanwhile, per-share earnings and gross margin beat expectations, offering evidence that Intel's restructuring efforts are already having an impact.

  • Nevertheless, the balance sheet worsened considerably, with skyrocketing debt, higher payables, and a plummeting cash balance due to increased investments, including a $600 million bet on WiMAX supplier Clearwire.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

% Change

Sales

$8,300

$8,009

$9,231

(13.2)

Net Profit

--

$885

$2,038

(56.6)

EPS

$0.13

$0.15

$0.33

(54.5)



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin

52.08%

56.36%

(4.29)

Op. Margin

13.38%

28.7%

(15.31)

Net Margin

11.05%

22.08%

(11.03)

*Expressed as percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

% Change

Cash + ST Invest.

$6,421

$12,600

(49)

Inventory

$4,332

$2,739

58.2

Accounts Rec.

$3,178

$3,448

(7.8)



Liabilities

Q2 2006

Q2 2005

% Change

Total Debt

$2,341

$748

213

Accounts Pay.

$6,570

$5,425

21.1



Learn the ways of the balance sheet.

Cash Flow Checkup

No cash flow statement provided. (Boo!)

Find out why Fools always follow the money.

Related Companies:

  • AMD
  • Apple Computer (Nasdaq: AAPL  )
  • Dell (Nasdaq: DELL  )
  • Freescale Semiconductor (NYSE: FSL  )
  • Marvell Technology (Nasdaq: MRVL  )
  • Microsoft (Nasdaq: MSFT  )

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Dell, Intel, and Microsoft are allMotley Fool Inside Valuerecommendations. Dell also happens to be aMotley Fool Stock Advisorpick. Check out our whole suite of newsletters by clicking here.

Fool contributor Tim Beyers owns LEAP options in Apple. You can find out what else is in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.


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