Intel Corporation (INTC) First Quarter 10-Q Takeaway

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Intel Corporation (NASDAQ:INTC) filed its first quarter 10-Q report with the SEC on Friday, April 25. Earlier this month, the chipmaker reported Q1 earnings of 38 cents on revenues of $12.8 billion. Analysts polled by Bloomberg were expecting $12.8 billion in revenues and 37 cents in earnings per share. Intel had managed to earn 40 cents with $12.6 billion in the same quarter last year.

Intel’s top three customers account for 42% of its revenue

Intel Corporation (NASDAQ:INTC) said in its 10-Q report that its three biggest customers accounted for 42% of the company’s total revenue during the quarter. Hewlett-Packard Company (NYSE:HPQ) accounted for 15%, Dell Inc contributed to 15%, while China’s Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) accounted for 12% of Intel revenue. The Santa Clara-based company expects its current quarter revenues to be in-line with seasonality.

The chipmaker generated $3.5 billion in cash flow from operations, lowest in the past eight quarters and down 42% QoQ. On a per share basis, cash flow from operations came at $0.68. The free cash flow of $812 million was also the lowest in eight quarters. As of March 21, the fair value of Intel Corporation (NASDAQ:INTC)’s long-term debt ($13.9 billion) was $700 million higher than its carrying value of $13.2 billion.

Intel Corporation (NASDAQ:INTC) said its total inventory declined 10% QoQ in the first quarter. Work in progress inventory fell 10%, and now accounts for 48% of the company’s total inventory. Finished goods inventory was down 13% QoQ, accounting for 40% of the total inventory. Meanwhile, raw material inventory rose 1% sequentially to make up 12% of the total inventory.

Intel spent $545 million on buybacks in Q1

Intel Corporation (NASDAQ:INTC) said it spent $545 million to repurchase 22.1 million shares during the first quarter. The Brian Krzanich-led company still has $2.6 billion of remaining stock buyback authorization. As of March 31, about 305 million Intel shares were available for future grant under the 2006 equity incentive plan. One significant achievement for the company is that it started production of its 14nm process technology during the latest quarter.


The Santa Clara-based company said it will launch its fifth-generation Core processor in the second half of this year. Intel’s first generation LTE is available in Samsung Galaxy Note 3 Neo and Asus Fonepad 7. And its second-generation LTE solution will start shipping by the end of the current quarter.

Intel Corporation (NASDAQ:INTC) shares inched up 0.45% to $26.60 at 1:57 PM EDT on Wednesday. Baird Equity Research has a Neutral rating on the stock with $26 price target.

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