Intel on the Rebound: Fool by Numbers
By
Anders Bylund
January 16, 2008
|
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.
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