INTC: Financial Analysis through December 2007 (Updated)

Intel's (INTC) preliminary financial results for the quarter that ended on 29 December 2007 did not include a complete Cash Flow statement. In our initial analysis of these results, we estimated Net Cash Flow from Operations (CFO) from other data. Intel subsequently submitted a complete set of financial statements, which included the Cash Flow data, in a 10-K Annual Report filed with the SEC.

CFO was significantly greater in the quarter than we estimated.

We have updated our analysis, and recalculated the gauges, to incorporate the actual data.

• Cash Management: 15 of 25 (was 13)
• Growth: 14 of 25 (was 11)
• Profitability: 13 of 25 (was 12)
• Value: 0 of 25 (unchanged)
  

• Overall: 33 of 100 (was 29)
  

The latest data changed the following metrics from the values reported earlier:

• Cash Management
  

• Debt/CFO = 0.2 years, unchanged from December 2006
  

• Growth
  

• CFO growth = 18.7 percent year-over-year, much better than our 8.3 percent estimate, and a major turn-around when compared to last year's -28 percent.
  

• Profitability
  

• Accrual Ratio = 7.7 percent, up (i.e., worsening) from last year's -1.2 percent. We're employing a a different equation to compute this metric, and it is indicating a decline in quality of earnings.
• FCF/Equity = 17.8 percent, up from 13.2 percent one year earlier
  

• Value
  

• Enterprise Value/Cash Flow (EV/CFO) is 11.6, up from 10.4 in December 2006.

There's another point that needs to be made. Intel's share price was $26.66 on 31 December, when the quarter ended. This price was used in the calculation of the Value gauge score, in keeping with our standard practice. Now, however, Intel shares are around $21, and they were recently below $20 per share. We recalculated the scores with with a share price of $21. The Value gauge score increased from 0 to 8 points, and the Overall gauge increased from 33 to a much healthier 47 points.