We all are highly impressed by machines and processors from Intel. The company is absolutely amazing and thus it has an ever increasing demand. With the help of its intricate products it has managed to deliver amazing profits and revenues, eroding its fear regarding technology obsolescence and thereby increasing the values of its shares.
The positive earnings of the company enhanced the company’s shares in the stock market by 8% leaving behind other tech leaders such as Microsoft and Cisco. The demand of the products manufactured by Intel is higher than expected. The gross margin guidance has grown considerably which was an outcome of the company’s confidence in itself and its products. The stock market showed an increment in Intel’s shares by 7.1% in the enhanced trade. Other devices manufactured by Intel saw a rise of 5% and the Texas instruments by 1.8%. It is assumed that the company is not spending on hiring employees, rather allocating its financial resources in developing new products through software and systems
With the increase in market share and reputation, the companies now enjoy rise in their budgets and operations and new improved versions of the old models. Intel’s centre group that manufactures chips for severs has helped in boosting the company’s image and ranking among other competitors.
Stock Concerns by Analysts
Increase in the inventories was seen as a warning by some analysts of dawdling demand in the chip manufacturing sector. Intel saw a sturdy demand for its products in the second quarter leading to increased level of stocks but with a caveat that the business situation could alter at a rapid pace. Intel’s shares have slipped along the other chip manufacturers recently, due to the fear regarding the industry wide addition of inventories and the affect of debt catastrophe. It was estimated that Intel was doing its business at 10-11 times its income which was less than the past years average.
This makes it evident that the stocks available in the market are not at all expensive and the capital budgets are being increased every year confirming to capacity utilization. This would probably lead to a change in the attitude of people from negative to an optimistic one. Intel expects much from the instigation of another product which is the Sandy Bridge processor. Also it desires to enhance its capital budget and has started preparing itself for this.
The net income of the company was $2.9 billion, whereas it incurred a net loss of $398 million in 2009 in second quarter, when it was imposed with a penalty of $1.4 billion by the European Commission. The earnings at the end of second quarter in June were around $10.8 billion which was less than the expected amount of $10.25 whereas, the gross profit was higher than expected by analysts.
Intel is one of the most competent and successive companies that has gone high in the profit world and surpassed its earlier records in selling of its products by making innovations and product designs catering to the needs of its customers.