On Tuesday, Oct. 16, computer chip giant Intel (NASDAQ:INTC) released third-quarter earnings for the period ended Sept. 29.

  • The average selling prices for Intel's processors were flat from last quarter, at long last putting an end to a pricing slide. The company also shipped products out in record unit volumes, increasing total revenues significantly for the microprocessor segment.
  • The gross margin improvement bears out the same story, along with lower manufacturing costs. The margins also show Intel's newfound willingness to walk away from low-margin deals once in a while. It's not the end of the price war, but you could call it a ceasefire.
  • Intel also had a large increase in new unit volume in flash memory chips -- but that segment still reported a sizable operating loss. The company is spinning out some of its flash assets in a joint venture with STMicroelectronics (NYSE:STM), presumably to limit the negative exposure to a low-profit market.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$10,090

$8,739

15.5%

Net Profit

$1,860

$1,301

43%

EPS

$0.31

$0.22

40.9%

Diluted Shares

5,967

5,832

2.3%

Get back to basics with the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

52.4%

49.1%

3.2

Operating Margin

22.3%

15.7%

6.6

Net Margin

18.4%

14.9%

3.5

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$10,796

$7,123

51.6%

Accounts Rec.

$2,933

$3,358

(12.7%)

Inventory

$3,541

$4,477

(20.9%)

Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$2,338

$2,401

(2.6%)

Long-Term Debt

$1,853

$2,060

(10%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q3 2007

Q3 2006

Change

Capital Expenditures

$1,088

$1,167

(6.8%)

Owner Earnings

$1,935

$1,390

39.2%

Free cash flow is a Fool's best friend.

Competitive Breakdown

Y-O-Y Revenue Growth

Net Income Margin

Intel

15.5%

18.4%

AMD (NYSE:AMD)

13.3%

(43.5%)

Texas Instruments (NYSE:TXN)

(7.4%)

17.8%

Broadcom (NASDAQ:BRCM)

(4.6%)

3.8%

NVIDIA (NASDAQ:NVDA)

36%

18.5%

Using the latest reported numbers from Capital IQ. Nobody is anybody without some context.

Related Foolishness:

Intel is a Motley Fool Inside Value recommendation, and NVIDIA is a Stock Advisor pick. 

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.

At the time of publication, Fool contributor Anders Bylund was an AMD shareholder but had no other position in any company mentioned. Fool rules are here.