01—Abstract
Summary
Summary of the 10-Q filed November 2, 2010. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation (INTC) reported a strong third quarter and first nine months of 2010, demonstrating significant year-over-year growth in net revenue and operating income.
Net revenue for the third quarter reached $11.1 billiona, an 18% increase from the prior year, driven by higher microprocessor unit sales and average selling prices. This robust performance was underpinned by strong demand in corporate segments and emerging markets, despite some softness in consumer segments of mature markets. The company's strategic focus on energy-efficient performance, internet connectivity, and security is being advanced through key initiatives, including proposed acquisitions of McAfee, Inc. and Infineon's Wireless Solutions business.
These moves signal Intel's intent to broaden its offerings beyond traditional chip manufacturing into complete hardware and software solutions. The company also reported healthy cash flow from operations and maintained a strong liquidity position, indicating financial stability.
02—Key points
Key Highlights
- Net revenue for Q3 2010 was $11.1 billion, up 18% year-over-year, reaching record quarterly levels.
- Operating income for Q3 2010 was $4.1 billion, a significant increase from $2.6 billion in Q3 2009.
- Gross margin percentage improved to 65.9% in Q3 2010 from 57.6% in Q3 2009, reflecting improved product costs and higher revenue.
- The company announced definitive agreements to acquire McAfee, Inc. for approximately $7.68 billion and Infineon's Wireless Solutions business for approximately $1.4 billion.
- Cash flow from operations was strong, totaling $11.1 billion for the first nine months of 2010.
- Diluted Earnings Per Share (EPS) for Q3 2010 was $0.52, a substantial increase from $0.33 in Q3 2009.
- Intel's 'tick-tock' technology development cadence is progressing, with 32-nanometer process technology products expected for launch later in Q4 2010.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2010, Intel Corp kept $0.27.
- Revenue$11.10B100.0%
- Cost of revenue−$3.78B34.1%
- Gross profit$7.32B65.9%
- Operating costs−$3.19B28.7%
- Operating income$4.14B37.3%
- Interest, other & tax−$1.18B10.6%
- Net income$2.96B26.6%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2010filed November 2, 2010Financial Statements
Q3 FY2010 against Q3 FY2009
| Line item | Q3 FY2010Q3 FY2009 | Change |
|---|---|---|
| Revenue | $11.10B$9.39B | +18.2% |
| Cost of Revenue | $3.78B$3.98B | −5.1% |
| Gross Profit | $7.32B$5.40B | +35.5% |
| R&D Expenses | $1.68B$1.43B | +17.1% |
| SG&A Expenses | $1.51B$1.32B | +14.1% |
| Operating Expenses | $3.19B$2.83B | +12.7% |
| Operating Income | $4.14B$2.58B | +60.4% |
| Net Income | $2.96B$1.86B | +59.2% |
| EPS (Basic) | $0.53$0.34 | +55.9% |
| EPS (Diluted) | $0.52$0.33 | +57.6% |
| Shares Outstanding (Basic) | 5.58B5.54B | +0.7% |
| Shares Outstanding (Diluted) | 5.69B5.62B | +1.4% |
05—Questions
Frequently Asked Questions
What was Intel's revenue performance in the third quarter of 2010?
Intel reported record quarterly net revenue of $11.1 billion for the third quarter of 2010, an 18% increase compared to $9.4 billion in the third quarter of 2009. This growth was primarily driven by higher microprocessor unit sales and average selling prices.
What are the key strategic initiatives Intel is pursuing?
Intel is focusing on three pillars: energy-efficient performance, security, and internet connectivity. To advance this strategy, the company announced definitive agreements to acquire McAfee, Inc., a leader in security, and Infineon's Wireless Solutions business, enhancing its connectivity offerings.
How did Intel's profitability change compared to the prior year?
Profitability saw a significant improvement. Operating income for the third quarter of 2010 increased to $4.1 billion from $2.6 billion in the same period of 2009. Diluted earnings per share rose to $0.52 from $0.33 year-over-year.
What is Intel's financial health and liquidity position?
Intel maintained a strong financial position, with $20.3 billion in cash, cash equivalents, marketable debt instruments, and short-term investments as of September 25, 2010. The company generated $11.1 billion in cash from operations for the first nine months of 2010 and had a low debt-to-equity ratio of 4.9%.
06—Continue