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Tuesday, October 17, 2006

Intel Tries to Appease the Naysayers

Intel (INTC) posted EPS $0.22 and revenues $8.7 Billion versus estimates of $0.18 and $8.6 Billion. It had already closed down $0.71 at $20.90 after Goldman Sachs lowered its rating to a Neutral this morning ahead of earnings. It cited valuations and "street estimates being too high." INTC shares are back up to $21.30 in after-hours trading, a gain of 1.9% from its -3.2% close.

Excluding options INTC would have shown $0.27 EPS. Here is the guidance they gave:

* Revenue: Expected to be between $9.1 billion and $9.7 billion.
* Gross margin: 50 percent, plus or minus a couple of points (51 percent, plus or minus a couple of points, excluding share-based compensation effects of approximately 1 percent).
* Expenses (R&D plus MG&A): Between $2.7 billion and $2.8 billion (between $2.5 billion and $2.6 billion excluding share-based compensation effects of approximately $250 million). In addition, the company expects restructuring charges of approximately $125 million.
* Net gains from equity investments and interest and other: Approximately $135 million.
* Tax rate: Approximately 30 percent.
* Depreciation: Between $1.1 billion and $1.2 billion.
* R&D for 2006: Approximately $5.9 billion (approximately $5.4 billion excluding share-based compensation effects of approximately $500 million).
* Capital spending for 2006: Between $5.7 billion and $5.9 billion, lower than the previous expectation primarily due to greater equipment reuse, productivity improvements and small timing changes.
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