Analysts:  John.kozey@thomsonreuters.com (646) 223-8182

When Intel (INTC.O) reports earnings on July 17, StarMine’s best ranked analyst forecasts, in the form of the SmartEstimate, of $0.523 pretty much agree with the mean forecast of $0.522.  That’s the good news.

SmartEstimate forecasts for earnings go south for the next quarter, with the current $0.623 EPS value 4% below the $0.649 mean.  And for the fiscal year ending in December 2012, the current SmartEstimate of $2.387 is 2.2% below the mean of $2.44.

SmartEstimates for revenues seem scarier, though this quarter’s $13.542 billion figure is just under the mean of $13.568 billion.  Next quarter’s SmartEstimates for revenues of $14.411 billion lie 1.6% below the mean of $14.644 billion.  Looking forward 12 months however, the SmartEstimate of $58.857 billion is 9.6% below the mean of $65.130 billion.  And that seems like a big difference between the best ranked analysts and the mean of all analyst forecasts.

Profit margins figure into the earnings numbers, and their directional movement has been lower.  As may be seen from the chart,

Intel’s Operating Profit Margins (blue line) are at 32.0%, down from 32.7% the prior quarter, and from the high of 35.7% in December 2010.  Compare that to the Information Technology Sector average of 11.0%, down from 11.3% in the prior quarter.  While not a harsh decline, it’s a decline nonetheless.

So on an absolute basis, shares might erode further from the recent $25 handle, as Intel’s traded between $12 and $35 over the past 10 years, even if macro events don’t hasten things.

Relative performance fans and dividend players may find another price drop as a chance to pick up shares cheaply, relative to other factors.  Dividend seekers can still take refuge in a 3.3% dividend yield (compared 2% for the S&P 500 and less than 1.5% in the US 10-year Treasury note) and Intel management’s ability to reinvest most of earnings into growing the business, considering that retained earnings make up 65% of the trailing four quarters’ results.

If you are still on the fence about Intel, the current economic climate appears to be offering you plenty of time to figure things out.