Intel’s Best-Rated Analysts See Revenue Decline Ahead
Analysts: John.email@example.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.
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.