Intel Corporation

Q1 Rev Est.:  $11.38 Bil

Q1 EPS Est.:  $0.47

Intel Corp. will report first quarter earnings after tomorrow’s closing bell.  On average, analysts are expecting $11.60 Bil in revenue with earnings of $0.46 per share. 

My models are predicting revenue to come in slightly below expectations—$11.38 Bil—with earnings slightly ahead—$0.47. 

Revenue

As evident from Exhibit 1, averaging each model’s prediction plus standard error appears to provide a relatively accurate estimate of quarterly revenue.  My estimate is below current consensus; however, I feel that it accurately reflects the seasonal nature of Intel’s business. 

Exhibit 1

Q3 Accuracy
Model	Prediction	Percent Er.	W/ St. Er.	Percent Er.
First-Order	$9,860	-11.19%	$10,891	-1.90%
Deseasonal	$10,267	-7.52%	$11,539	3.93%
Dummy	$10,190	-8.21%	$11,252	1.36%
Lagged	$9,510	-14.34%	$10,611	-4.43%
AVERAGE	$9,957	-10.31%	$11,073	-0.26%
	AVERAGE	$11,073	-0.26%
Actual Q3-2010		$11,102

Q4 Accuracy
Model	Prediction	Percent Er.	W/ St. Er.	Percent Er.
First-Order	$10,180	-11.15%	$11,216	-2.10%
Deseasonal	$10,764	-6.05%	$12,058	5.24%
Dummy	$10,512	-8.25%	$11,555	0.86%
Lagged	$9,551	-13.97%	$10,677	-6.81%
AVERAGE	$10,252	-9.85%	$11,377	-0.70%
	AVERAGE	$11,377	-0.70%
Actual Q4-2010		$11,457

Q1 Projection
Model	Prediction	W/ St. Er.
First-Order	$10,513	$11,556
Deseasonal	$10,108	$11,420
Dummy	$9,977	$11,006
Lagged	$10,362	$11,526
AVERAGE	$10,240	$11,377
PREDICTION	$11,377

Earnings

I am anticipating an EPS figure of $0.47.  This reflects an increased Cost of Sales figure due to the NVIDIA agreement, along with an effective tax rate of 30.2%.

                                          

Exhibit 2

Income Statement
Three months ended March 31, 2011
Net Revenue	$11,377
Cost of Sales	4,278
Gross Margin	7,099
R&D	1,670
MG&A	1,672
Amortization	7
Operating Expenses	3,349
Operating Income	3,749
Gains/(Losses) on Equity Investments	-39
Gains/(Losses) on Other Equity Investments	-27
Interest and Other, Net	95
Income Before Taxes	3,778
Provision for Taxes	1,141
Net Income	2,637
Diluted EPS	$0.47

INTC Ownership

Author:   NO

Author’s Family:  NO

Disclaimer:
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