Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Foolish Forecast: Wow Us, Intel

It's been a good 18 months since chip king Intel (Nasdaq: INTC  ) missed expectations in an earnings report. Anyone want to bet that the semiconductor maker won't wow us once again when it reports third-quarter 2007 earnings on Tuesday?

What analysts say:

  • Buy, sell, or waffle? The Wall Street crowd sure doesn't. Thirty-eight analysts track Intel, with 30 rating the stock a buy, and eight more a hold.
  • Revenue. On average, analysts expect 10% sales growth, to $9.61 billion.
  • Earnings. Meanwhile, profits are predicted to soar 36%, to $0.30 per share.

What management says:
Intel updated investors on its Q3 guidance last month, raising revenue guidance on both the low and high ends to a new range of $9.4 billion to $9.8 billion. Margin-wise, the firm also raised its numbers, now expecting to gross about 52% on every dollar of revenue brought in.

Nor is that the only news at Intel this quarter. The company wreaked Havok on the software industry and rival AMD's (NYSE: AMD  ) gaming prospects in September, before moving on to challenge (or did it embrace?) Apple's (Nasdaq: AAPL  ) iPod hegemony. Also, let's not forget Intel's sizable investment in Clearwire (Nasdaq: CLWR  ) .

(Does that validate Sprint Nextel's (NYSE: S  ) move into WiMAX? Drop by CAPS and tell us what you think.)

What management does:
Getting back to the future, Intel's promise of a 52% gross just has to raise investors' spirits. For all of Intel's success in beating estimates, the firm's gross margins have undeniably trended downward.





























All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Intel has returned nearly 30% to Motley Fool Inside Value members who took our advice to buy the stock in April 2006. But is 30% all we can expect from this company, or should we hunger for more?

Inside Value advisor Philip Durell thinks the good times aren't over yet. Reviewing the company's latest earnings report, he highlighted the gross margin issue mentioned above as the primary reason why investors reacted negatively to the report -- or overreacted, in Philip's opinion. Citing "$600 million savings in capital expenditures as well as lower inventory requirements and unit costs," anticipated gross margin improvement, and the firm's leap ahead of AMD in producing 45-nanometer chips, Philip calls Intel the "ultimate victor" in the ongoing price war with AMD.

That's a good enough reason to refrain from selling, but does this value guru actually recommend buying the stock at these prices? Pick yourself up a 30-day free subscription to Inside Value and find out.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 538428, ~/Articles/ArticleHandler.aspx, 10/25/2016 6:54:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
INTC $35.26 Up +0.11 +0.31%
Intel CAPS Rating: ****
AAPL $117.65 Up +1.05 +0.90%
Apple CAPS Rating: ****
AMD $7.01 Up +0.49 +7.44%
Advanced Micro Dev… CAPS Rating: **
CLWR.DL $0.00 Down +0.00 +0.00%
Clearwire Corp CAPS Rating: **
S $6.92 Up +0.37 +5.65%
Sprint CAPS Rating: **