Following a similar pattern from the past several quarters, Intel Corp. (INTC) has posted an impressive earnings beat headline of 59 cents per share on revenues of $11.5 billion in the company’s fiscal 4th quarter of 2010 after the bell Thursday. The Zacks Consensus Estimates had been 53 cents per share on $11.367 billion in revenues.
In fact, the numbers marked Intel’s best 4th quarter ever, and set company records for EPS, revenue, gross margin (67.5%) operating income ($4.3 billion) and net income ($3.4 billion). President and CEO Paul Otellini proudly crowed, “2010 was the best year in Intel’s history.” This is also true. And with full-year EPS of $2.05, that’s a 166% increase over fiscal 2009 EPS of $1.28, on revenues totaling $43.6 billion, up 24% year over year.
You’ll forgive us if we don’t overstate the importance of this outperformance; we seem to see this every quarter from Intel. First, analysts tend to keep their initial quarterly estimates locked in for the entire quarter with almost no upward revisions. Second, there always seems to be some point within each quarter where analysts doubt whether Intel has enough oomph to meet its estimates come earnings report time. And third, even when the positive earnings surprises do occur, they tend to be met with a lukewarm reception by investors in after-hours trading.
To wit, the Zacks Consensus Estimate of 53 cents per share is unchanged from 90 days ago. There had been some downward pressure on estimates as recently as last week, in fact, when 5 of the 40 analysts covering Intel downwardly revised their earnings estimates for both the quarter and fiscal 2010. And after INTC shares dipped by a penny before the bell today, it has gone up 2.77% (59 cents) since its earnings announcement — to right about the mid-point of where the shares have been trading over the past year.
Still, all-time bests deserve at very least a tip of the cap, and Intel has proven it can at least maintain its lofty status as the world’s top chip-maker among increasing competition from other tech giants the world over. Recently, Intel announced a settlement of its legal disputes with NVIDIA Corp. (NVDA) which will cost Intel $1.5 billion but allow the companies to cross-license technologies (see: “Intel-NVIDIA Deal a Win-Win”).
Intel gave revenue guidance for Q1 2011 of $11.5 billion — the exact amount the company made in the 4th quarter, and ahead of the current Zacks Revenue Consensus for next quarter. Intel currently carries a Zacks #3 Rank (Hold) and a Neutral recommendation. Friday before the opening bell we will have much more on Intel’s 4th quarter and fiscal year earnings results.
INTEL CORP (INTC): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis Report
Zacks Investment Research
