Intel Corporation Mobile Concerns Overblown

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Intel Corporation (NASDAQ:INTC)’s business quality is among the “best of the firms” covered, says a report from Seeking Alpha by Valuentum Securities. Moreover, the chip-maker is offering economic value to  shareholders with comparatively stable operating results over the past few years, which is a positive combination.

Mobile concerns overblown

The firm’s most recent quarter was impressive, with the company beating both the top and bottom lines along with giving a solid outlook. The doubts that Intel will be able to catch up with the mobile revolution are not a concern anymore, according to the report. The company will shell out billions on research and development in the future to become a strong competitor in the mobile space.

According to the report, Intel shares are worth $33 apiece, and annual revenue growth rate is expected to be 3.4% ober the next five years, which is lower than the firm’s three-year historical compound annual growth rate of 6.5%.

Intel Corp.’s 5-years projected average operating margin is expected to be 26.5%, which is less than company’s trailing 3-year average. After five years, the analysts are expecting free cash flow to rise by an annual rate of 2% for the next 15 years and 3% into perpetuity.

Solid 3Q numbers from Intel

The third-quarter was the company’s best ever in terms of revenue.It was also the first time that the company shipped more than 100 million microprocessors in a quarter. For the quarter, operating income for came in at $4.5 billion, which is a growth of 30% on a year-over-year basis. Intel Corporation (NASDAQ:INTC) reported 5.7 billion in cash flow from operations, which again was impressive, and the management continues to return cash to shareholders in the form of dividends and buybacks

Intel also provided positive fourth-quarter revenue guidance of $14.7 billion +/- $500 million, which was up 1% sequentially. For the 4Q, the gross margin for the company is expected to come in at 64% while the third-quarter margin came in at 65%. The difference of one point from the third to the fourth-quarter is “driven by higher platform unit costs, higher factory start-up costs, partially offset by lower production costs on 14nm,” noted CEO Stacy Smith.

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