RE: Intel's capital expenditures
Starting in 1992, Intel's annual expenditures, depreciation, and net income were as follows:
Net Income: 1077M, 2277M, 2562M, 3491M, 4231M (Est.)
Depreciation: 518M, 717M,1028M, 1371M, 1,900M (Est.)
Cap. spending: 1231M, 1931M, 2445M, 3547M, 3610M (Est.)
Figuring cap spending/income does not take into consideration the positive cash flow from depreciation.
Adding depreciation to net income and then deducting cap. spending gives you "owner eanings". Since 1992 these are:
Owner Earnings: 364M, 1063M, 1146M, 1315M, 2521M (Est.)
The 1996 estimates may be low since they do not include the latest earnings report, but the trend is clear. As income and depreciation increase faster than growth in cap. spending, earnings available to the owners increases dramatically. I believe this was a major factor holding down Intel's PE in the past (along with some others), and a major reason why the PE will be adjusted upward in the future.
HL |
