Intel (INTC) Shares Moving Lower Despite Q1 Beat, Inline Q2 Outlook

April 17, 2012 4:38 PM EDT
Investors in Intel (Nasdaq: INTC) are selling the news Tuesday afternoon despite better-than-expected first-quarter sales and profits. Although the stock closed the intraday session higher, shares gave up a large chunk of gains just ahead of the bell. Intel shares are now down about 3.4 percent from an afternoon high hit at 3:30pm ET.

The company saw net revenue increase very modestly from $12.85 billion in the same quarter last year to $12.91 billion. Analysts on the Street were expecting quarterly sales of $12.84 billion.

Sales across the globe were mostly unchanged. 57 percent of Intel's revenue came from the Asia-Pacific region, 20 percent came from the Americas, 14 percent came from Europe, and 9 percent came out of Japan. During the first quarter of 2011, Intel reported sales in Asia-Pacific totaled 56 percent of total revenue, sales to the Americas were 21 percent, sales in Europe made up 13 percent of revenue, and sales within Japan made up 10 percent.

Net income during Intel's first quarter 2012 fell 13 percent from $3.16 billion in the year-ago quarter to $2.738 billion. GAAP earnings totaled 53 cents per share, down from 56 cents per share reported last year. On an adjusted basis, profit per share fell about 3 percent to 56 cents. The Street was looking for EPS of 56 cents.

Paul Otellini, Intel's President and CEO said, "The first quarter was a solid start to what’s expected to be another growth year for Intel. In the second quarter we’ll see the first Intel-based smartphones in the market, ship products based on 22nm tri-gate technology in high volume, and accelerate the ramp of our best server product ever, providing a tremendous foundation for growth in 2012 and beyond."

The company is modeling for second-quarter sales in the range of $13.1-$14.1 billion, which compares to the analyst consensus estimate of $13.43 billion. Gross margin will be in the range of 62-63 percent.

FY12 gross margin is expected to be in the range of 64-65 percent on an adjusted basis.

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