Intel’s Q2 2012 results are solid, Q3 guidance lowered

July 18, 2012 — Intel Corporation reported Q2 revenue of $13.5 billion, operating income of $3.8 billion, net income of $2.8 billion and EPS of $0.54. The company lowered its Q3 guidance, citing “a more challenging macroeconomic environment.”

“With a rich mix of Ultrabook and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we’re making in our product and manufacturing areas, we are well positioned for this year and beyond,” said Paul Otellini, Intel president and CEO.

The semiconductor company generated approximately $4.7 billion in cash from operations, paid dividends of $1.1 billion and used $1.1 billion to repurchase stock. Get the Q2 report details here.

Analysts’ takes:

FBR Capital Markets analysts called Intel’s Q2 numbers “surprisingly solid” and saw its somewhat lower Q3 guidance as “generally resilient.” Strong operations management is the key to Intel’s strength through a softer H2 2012, added Barclays Capital’s analysts.

Intel reduced its 2012 forecast from high-single-digit growth to 3-5% growth, with macroeconomic softness offset somewhat by strong operations and Ivy Bridge chip sales, Barclays noted. Intel’s fast 22nm ramp is driving confidence in the company.

“Intel continues to have a very profitable PC processor franchise and is pressing its bets in manufacturing (multiple fabs ramping), process (14nm ramping soon), and technology development (ASML deal) to drive global best-in-class production costs and very respectable margins,” said FBR analysts, tempering the statement with, “Intel’s execution outside of manufacturing and processor design is less robust as key diversification and growth opportunities contribute only modestly (cellular losing momentum, no 4G LTE, no baseband/apps processor integration).”

Intel will likely be better than most chipmakers in this earnings cycle, FBR said. The macroeconomic factors dampening Intel’s outlook include soft demand in Europe and emerging markets, a strengthening dollar hurting foreign PC affordability, and downstream supply chain participants managing inventories leaner ahead of the Win8 ramp in 4Q12. Barclays sees Intel’s focus shifting to the timing and magnitude of a second-half 2012 PC recovery, led by Win8/Ultrabook.

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