After the Tuesday bell, Santa Clara, Calif.-based Intel Corporation (NASDAQ: INTC) announced its Q2 earnings report, boasting earnings per share of 54 cents which beat estimates by 2 cents per share. However, overall revenue of $13.5 billion (up 4 percent over the same quarter in 2011) missed expectations by about $60 million. As a result, INTC stock fell about 2 percent immediately after Tuesday’s close,then rallied later and was up an additional 1.2 percent in the early moments Wednesday to $25.70 per share.
Also part of the announcement was the firm’s guidance for the remainder of the year. Intel said it expected its Q3 revenue in the range of $13.8-$14.8 billion, compared to a estimated $14.6 billion, and overall revenue growth for 2012 to be in the 3-5 percent range, with estimates sitting at 4.7 percent. Gross margin is expected to be about 63-64 percent in the third quarter, while the company announced its Q2 margin was 64.4 percent (down from 65.1 percent in the previous quarter).
“The second quarter was highlighted by solid execution with continued strength in the data center and multiple product introductions in Ultrabooks and smartphones,” said Paul Otellini, Intel CEO. “As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment. With a rich mix of Ultrabook and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we’re making in our product and manufacturing areas, we are well positioned for this year and beyond.”
The company repurchased about $1.1 billion in shares during the last quarter, and paid the same amount in dividends to stockholders. For the quarter, Intel announced net income of $2.8 billion (down from $2.9 billion in the prior quarter) and $4.7 billion in cash generation. Revenue was up 5 percent from the prior quarter and net income was 3 percent better. The company’s PC client group segment increased revenue by 3 percent to $8.7 billion, while its data-center segment increased 14 percent to $2.8 billion. Intel lost revenue in Europe and Japan, but gained in the Asia-Pacfic region and the Americas, which make up about 79 percent of the company’s business.
The news from Intel is generally positive, which would seem to bode well for Ken Fisher’s Fisher Asset Management and Paul Ruddock and Steve Heinz’ Landsdowne Partners, for example. These two hedge funds alone were invested a combined $1.6 billion in Intel as of the end of March. Fisher had increased its stock holding by 1 percent during the quarter, while Landsdowne had shed 5 percent of its shares.