Novice Investing - Intel Fails To Inspire

Date: Thursday 20th 2008f November 2008 04:53:25 PM

Intel Fails To Inspire - 12/9/2005

By: Novice Investing Staff

Late Thursday 8th December 2005, Intel Corporation (INTC) narrowed its revenue guidance to between $ 10.4 - $ 10.6 Billion. The midpoint of the new revenue guidance is lower than the $ 10.6 Billion that analysts expected. On early Friday, share fell 2 % before the bell.

Intel's CFO, Andy Bryant, reiterated that Intel still experiences strong growth in emerging markets, and better manufacturing efficiencies that lowers cost. Last month, Intel announced $ 25 Billion buyback to support its stock price. Any drop in stock price is certainly welcomed as the company can buy more shares with the same amount of fund.

Now, what? Not much is going on at Intel. Its stock price has hovered near fair value for quite some time now. Analyst expect $ 1.43 of earning per share for 2005. Subtracting Intel's positive net cash of $ 2.82 per share, Intel is trading at 16 times earnings. This is perhaps the fair value of a company that is expected to grow earning 15.5 % annually for the next five years.

Is 15.5 % earning growth reasonable? It seems like it. Andy Bryant explained that the additional revenue from Apple's new shift to Intel chip will contribute to revenue growth next year. Previously, Apple's Macintosh PC used chips manufactured by IBM. Other growth can be achieved from the overall increase in demand from emerging economies and the company's wireless initiatives.






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Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding Intel Corporation (INTC) or any other securities.

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