Friday, August 28, 2009

Intel raises guidance (INTC)

AlphaNinja - Within hours of Dell's earnings, Intel raises guidance for third quarter results:

SANTA CLARA, Calif.--(BUSINESS WIRE)--As a result of stronger than expected demand for microprocessors and chipsets, Intel Corporation now expects revenue for the third quarter to be $9.0 billion, plus or minus $200 million, as compared to the previous range of $8.5 billion, plus or minus $400 million.

The gross margin percentage for the third quarter is expected to be in the upper half of the previous range of 53 percent, plus or minus two percentage points.

With large fixed costs, Intel's gross margin increases quickly with higher than expected revenues.

Intel's earnings per share for 2009 are estimated at about 56cents - about to rise thanks to this preannouncement. 2010 earnings estimates are pegged at 1.12. Those figures lead to Free Cash Flow of $4.2billion and $7billion in 2009 and 2010. Taking the higher 2010 estimate implies a FCFY(Free Cash Flow Yield) of 7.6% based on the company's (net of cash) $92billion market value. Not the kind of yield I chase.

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