Intel on the Rebound: Fool by Numbers
By Anders Bylund
January 16, 2008
Recommended (4)
On Jan. 15, Intel (Nasdaq: INTC) released earnings for the 2007 fiscal year, the period ending Dec. 29.
- 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
|
*Expressed in percentage points.
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%
|
|
Owner Earnings
|
$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 (Nasdaq: JAVA)
|
$12,990
|
22.9
|
***
|
|
Marvell Technology Group (Nasdaq: MRVL)
|
$6,200
|
N/A
|
****
|
|
Micron Technology (NYSE: MU)
|
$4,260
|
N/A
|
**
|
|
Advanced Micro Devices (NYSE: AMD)
|
$3,240
|
N/A
|
**
|
Using the latest reported numbers from Capital IQ.
Keep your partners close and the competition in your vest pocket.
Related Foolishness:
What do the unfolding financial crisis and ongoing market volatility mean for your money? The Fool's here with answers. Get the best of our daily commentary and analysis in your inbox simply by entering your email address in the box below.