Intel sees second quarter sales at $12.9 billion plus or minus $500 million with gross margin at 58% plus or minus a couple of percentage points. Estimates were $0.40 EPS and $12.87 billion. What may be some comfort for investors is that Intel is maintaining its 2013 earnings guidance. Intel also said that revenue is unchanged from prior views with low single-digit percentage gains and gross margin of 60 percent plus or minus a few percentage points is unchanged from prior expectations.
Cash generation from operations came to approximately $4.3 billion and the company paid out $1.1 billion in dividends. If you take out the $533 million used to repurchase 25 million shares of stock, that generates an implied price of about $21.32 spent per share.
Today’s earnings will be considered good enough for what is a challenging time. While Intel scored 56% gross margin, that is down 2 points sequentially and down 8 points from a year earlier. To prove how challenging this are look at this: PC client group (processors) were -6.6% sequentially and -6% from a year ago. Even the data center revenue was down by -6.9% sequentially but that was actually up 7.5% from a year ago. The Architecture group sales were down by 3.9% sequentially and down 9% from a year ago. And yet, this is good enough.
Intel shares were up almost 2.5% at $21.91 on Tuesday against a 52-week trading range of $19.23 to $29.27. So far we have the stock up 2% at $22.36 in the after-hours session.
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