On Jan. 15, Intel
- Don't read too much into the impressive-looking profit growth and margin expansions. After all, 2006 was a disastrous year for Intel, and makes for easy year-over-year comparisons.
- Even in lean years, the company remains a cash-minting machine, with an ironclad balance sheet to match. Management is mum on what it intends to do with its lavish loot, though.
- Intel spent $2.75 billion on share buybacks in 2007; more than half of it in the fourth quarter. That still wasn't enough to cancel out the dilution from employees converting their bonus options.
(Figures in millions, except per-share data.)
Income Statement Highlights
FY 2007 |
FY 2006 |
Change |
|
---|---|---|---|
Sales |
$38,334 |
$35,382 |
8.3% |
Net Profit |
$6,976 |
$5,044 |
38.3% |
EPS |
$1.18 |
$0.86 |
37.2% |
Diluted Shares |
5,936 |
5,880 |
1.0% |
Get back to basics with the income statement.
Margin Checkup
FY 2007 |
FY 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
51.9% |
51.5% |
0.4 |
Operating Margin |
21.4% |
17.5% |
3.9 |
Net Margin |
18.2% |
14.3% |
3.9 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
FY 2007 |
FY 2006 |
Change |
---|---|---|---|
Cash + Short-term Investments |
$12,797 |
$8,868 |
44.3% |
Accounts Receivable |
$2,576 |
$2,709 |
(4.9%) |
Inventory |
$3,370 |
$4,314 |
(21.9%) |
Liabilities |
FY 2007 |
FY 2006 |
Change |
---|---|---|---|
Accounts Payable |
$2,361 |
$2,256 |
4.7% |
Long-Term Debt |
$1,980 |
$1,848 |
7.1% |
The balance sheet reflects the company's health.
Cash Flow Highlights
FY 2007 |
FY 2006 |
Change |
|
---|---|---|---|
Cash From Ops. |
$12,000 |
$10,620 |
13.0% |
Capital Expenditures |
$5,000 |
$5,779 |
(13.5%) |
Free Cash Flow |
$7,000 |
$4,841 |
44.6% |
$6,774 |
$4,177 |
62.2% |
Free cash flow is a Fool's best friend. Rough 2007 cash flow figures from Intel's earnings call; owner earnings calculated from reported figures.
Competitive Context
Market Cap (millions) |
Trailing P/E Ratio |
CAPS Rating |
|
---|---|---|---|
Intel |
$115,770 |
19.2 |
|
Sun Microsystems |
$12,990 |
22.9 |
|
Marvell Technology Group |
$6,200 |
N/A |
|
Micron Technology |
$4,260 |
N/A |
|
Advanced Micro Devices |
$3,240 |
N/A |
Keep your partners close and the competition in your vest pocket.
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