Tony:
Re: Just thinking, why didn't Intel also warn about missing earnings? Still up in the air?
Here's my analysis - but it's strictly based on available data, and I have no access to Intel's financial data.
CNNfn reported that old estimates were for a 6-8% increase in Q3 from the Q2 revenues of $8.3B. Today, Intel says (1) revenues should increase 3-5% over Q2; (2) gross margin should be about 62%, down from prior guidance of 63%; and (3) interest should be about $100M higher than previous guidance.
From (1) above, old revenue estimate for Q3, based on an average of 7% increase, would give $8.881B, while newly revised estimates, using an average of 4% increase, would give $8.632B.
From (2) above, gross profit before warning, using 63% gross margin percentage, would give 8.881x.63=$5.595B, while new guidance, using 62%, gives a gross profit of $5.3518B, or a decrease of $243M.
From (3) above, this decrease in gross profit will be offset by a $100M increase in interest income, so the resulting decrease in earnings, before taxes, would be $143M.
The tax rate is estimated at 31.8%, so the decrease in after-tax profit would be 143x.682 = $97.5M. With 7B shares outstanding, this would result in a EPS decrease of 97.5M/7B = 1.4 cents per share.
So unless I'm doing my math wrong, Intel appears to be getting punished by 33% from it's recent highs for a 1.4 cents/share shortfall in Q3.
Again, my analysis and opinions only.
Adam |
