Permanent R&D Tax Credit Could Boost Semi 4Q EPS - Sterne Agee CRT (ADI) (INTC) (IPHI) (TXN)

Sterne Agee CRT analyst, Douglas Freedman, commented on the recent legislation that makes temporary R&D tax credits permanent. The impact is nominal but should build cushion in 4Q.

Congress signed a massive bill that gave R&D tax credits, which used to be temporary and require periodic review and renewals, a permanent status. The greatest EPS impact is on INTC, TXN, and IPHI 4Q earnings. The overall impact is minimal however because estimates include a shift in taxes between quarters as 4Q acts as the catch up.

Four companies are likely to benefit with a 1-2 percentage point increase in the tax rates: Analog Devices (NASDAQ: ADI)
Intel (NASDAQ: INTC), Inphi Corp. (NYSE: IPHI), and Texas Instruments (NASDAQ: TXN).

No changes to Price Targets or ratings.

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