Intel (INTC) 1Q:2008 Results

Hmm. So Intel reports in line with their pre-announcement. The tax rate inches a bit higher.

They guide to 9.0 - 9.6 bil, which is a 9.3 bil midpoint, slightly higher than the consensus (surprise). Gross margins are also guided in line with consensus. The sky is not falling. Tech will breathe a sigh of relief.

There's a couple of things that are happening below the line that will probably bring numbers down. Interest income will be 75mm instead of the 150mm they've had for the last several quarters -- I guess 10 billion of cash earns a lower rate when the Fed cuts every 5 minutes. The tax rate is also creeping higher to 33% vs models of 31%.

Intel didn't use the economy to take down numbers. I think it's kind of a missed opportunity for them to set the bar where they could beat it. Now I think they'll have to struggle next quarter to get where they say they'll be. Despite ditching the money-losing NOR business and business holding up better than anticipated, gross margins are stuck on previous plan. They should have gone up on an in line revenue guide.

I continue to believe Intel is a mature cyclical and the long-term growth rate is mid single digits. I think at $22 it should be growing in at least double digits. That's not what you're getting.

In summation, I'm glad the tech tape will act better because it's cheap... but Intel isn't.

5:02pm --

Apparently the model I was using was a percentage point above consensus. Oops. Keep in mind that Intel guides margins in a range and not to a single point, partly to reflect variability in the number. So they did in fact raise gross margins after dropping the money losing NAND business. Sorry for any confusion. Still expensive. Bye.