Thursday 17 October 2013

Intel report Q3 2013

An American technology company

The American companies are much faster then the European and German ones when it comes to pushing out their financial quarter reports. They also tend to be short and tell only the main points without containing a multitude of coloured pictures which looks flashy but really does not make me want to own the company since that decreases the company earnings and my dividend.

Intel report Q3 2013

The third quarter report from Intel is still hot from the press (please find it here) and I directly jumped on it to take a look at how my one and only US company is doing over on the other side of the Atlantic ocean.

The latest news that I have heard, before this quarter report, from Intel was that they were trying to partner with any one of the cable TV companies to try to push out their new internet TV. It seemed, at least in the news, as if that cooperation was hard to accomplish and that Intel would start to push it on their own but with a delay meaning that it would not get started until sometime in 2014. Since I only look at the past and the current moment in a companies life I look upon those news as good news since Intel is coming with a completely new product on a market that has, besides from the arrival of digital TV, been standing pretty still.

Here is the short summary taken form their report:

Intel Q3 2013

From the highlights we see that they managed to push up their earnings from last quarter with 5% and managed to keep their costs in balance, they also managed to decrease their tax rate from expected 26% to 25% which gave around an additional 200 million USD in earnings. This is however something that I do not really like. If you make good earnings then also pay taxes! As a company you profit from having your business in a fully functional country and the only way for it to remain like that is to provide it with tax money so that the infrastructure is intact, your workers can be treated when they are hurt or ill etc. but this I was ranting about not that long ago here.

When I take a closer look at the consolidated statement and compare the nine months running of 2013 vs. 2012 then I see that revenue is down, cost of sales are higher and in real values we have a net earnings of almost 7 billion USD vs. 8.5 billion USD in 2012 (so down around 18%). Looking at the different Intel segments then the PC decreased their income pretty significantly, the Intel Architecture made a large income loss of 1.8 billion USD and "All other segments" made an income loss of 1.5 billion USD.

So simply put the highlights are slightly too "highlighted" for my opinion.

Conclusion: Intel is not doing great but it is a great company with billions of USD in earnings year after year. This quarter report does not scare me away and I will keep them in my stock portfolio but I also do not see a reason to increase my holding based on this report.

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