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  • Intel 2012 2Q Financial Analysis

    Intel 2012 2Q results are positive, company is back to growth track after past few quarters of decrease. Revenue is up both if compared with 2011 2Q and 2012 1Q by

    Companies main sales goes to Assia-Pacific region. Since this region will continue to show largest growth that is a good news. Compared to previous year sales in Assia-Pacific is up. Sales are down in Americas, so company is losing at this market. Surprisingly sales in Europe are also up dispute recession in EU.

    Main 2/3 of companies revenue and profit comes from PC area, which is up both in revenue and profit.

    According to Intel share in CPU market remains ~80% which is a good thing as company continues to hold on to its main market leader position and even growing it. In general companies results are positive.

    Companies Equity level remains strong and is up a little bit to 67%. Equity has finally showed stable increase. Previously it has decreased due to quite aggressive share repurchase spending in Y2011 in total 12,3 bn.$. Not in 2012 1 half year these spending are much more balance and only reach 1,2 bn.$ Dividend payment is 2,1 bn.$/half-year. In total its 3,3 bn.$ or 36% from earned 9,2 bn.$ in half-year which is good level. Equity level of ~80% was quite strong, so its decrease in order to increase earning per share is quite responsible. Good thing it did not continued.

    Other companies ratios are also good. Liquidity ratio is over 2,5. Cash and investments holds ~9 bn.$ which is ~1/8 of total companies asset. Inventory and account receivables turnover is around 30 days which is good. Companies investments into long term property (equipments, plants ect.) is 2-3 bn.$/quarter which is good because this will bring profit in the future. In general companies balance structure is strong.

    Share value:

    Equity / share48,8 bn.$5,013 bn.9,7 $/sh.
    Market value26,2 $+16,5$4,6 years
    Year Net income before Depreciation18,1 bn.$+3,6$/sh.13,7%

    Companies share basic value has decreased to ~9,7$ (Δ+3%/9,4$ compared with Q1). Current market price is ~26$ (Δ-7%/28$) which shows that market is paying 16,5$ more or 4,6 years (5,1 years) of Net income before Depreciation earnings which is 18,1 bn.$ (Δ+1%/17,9$). Companies shares market evaluation is quite good. Share profitability (Share market price/Net income before Depreciation) is 13,7% (12,8%) which is quite good.

    Company pays 0,225$/share/quarter dividend or ~3,4% (3,2%) dividend yield which is good, with dividend payout ratio ~25% which is also a good level. Company has increased its dividend payments up from 0,21$ to 0,225$ or by +8% compared to last year. Companies cash flow management can be considered as well balanced. In general share evaluation and profitability is quite good and has improved since last review due to decrease of share price.

    Analysis source: Intel 2012 2Q financial results

    Previous analysis: Intel 2012 1Q financial analysis

    Tags: INTC
    Aug 31 4:08 PM | Link | Comment!
  • Facebook 2012 2Q Financial Analysis

    Facebook 2Q saw large amount of expenses, which lead to -0,6 bn.$ Net earnings before depreciation. Revenue shows further growth by 45% if compared to 2012 2Q and by 12% if compared to previous 1Q, which is a good sign. Main source of loss was 1,56 bn.$ of operational expenses. Out of which 0,7 bn.$ was in Research and development. This is basically where Facebook is spending its IPO gathered 6,7 bn.$. Facebook like other IT companies has issue of "expenses first, revenue later" so it is possible that this will increase companies revenue in the future. For how much its hard to speculate, but revenue do show growth as can be seen from graph below. Anyway it is hard to tell if these expenses will lead to profit in the future, of just can be wasted. Another thing is that cost of revenue is increasing faster then revenue growth, which must be watched closely.

    Growth is defiantly driven by user number increase which continue to grow almost in a straight line, about by +6% compared to Q1 and reached almost 1 bn. Mobile active users. This growth will come to a halt one way or another, because of market fill-up effect which can be seen in US/Canada figures where growth is only from 183 m. to 186 m. or by just +1,6%. Mobile user growth shows even larger increase from 488 m. to 543 m. of increase by +11%. In general companies results hard to evaluate and bases more on expectations of the future growth.

    (click to enlarge)

    Companies balance structure is quite good with strong equity base which after IPO has even increased further up to 89%. Most of IPO 6,7 bn.$ was not spent, but ~6 bn.$ went to short term investments. ~0,9 bn.$ went to property and equipment purchase, 0,6 bn.$ went to acquisition of patents from IBM. Also 1,1 bn.$ of these funds will be used for Instagram and So company id not spent all of their money, but sure have places were to put them. Liquidity has gone up to 12. High equity lead to other issue - low return on equity, so company need to show ability to generate more revenue and profit for increased equity. In general companies balance structure is strong.

    Share value:

    Equity / share13,3 bn.$2,142 bn.6,2 $/sh.
    Market value19,1 $+12,8 $8,5 years
    Year Net income before Depreciation1,5 bn.$+0,7 $/sh.3,7%

    Companies share basic value is ~6,2$. Present market value of the share is 19$ or 12,8$ more then its basic value. Net income before Depreciation is hard to evaluate due to increase of expenses after IPO, but previously 1,5 bn.$/year level can be taken as a base for calculation, that leads to 8,5 years, which is quite a reasonable number taking into consideration that present increase of expenses may lead to visible growth in the future, but that is only an expectation. This figure is a lot better then 21 years at 38$ IPO time, due to share losing 1/2 of its value since then. Share profitability (Share market price/Net income before Depreciation) is just 3,7% which is still a very low level if using base 1,5 bn.$ Net income. It is due to companies IPO that largely increased its equity, but company does not yet showed its ability to generate more profit by now.In general share value is more reasonable then previously, but companies evaluation is mainly based on expectations, not actual figures.

    Analysis source: Facebook 2012 2Q financial report

    Previous analysis: Facebook 2012 1Q (NYSEARCA:IPO) financial analysis

    Tags: FB
    Aug 21 11:04 AM | Link | Comment!
  • Microsoft 2012 2Q Financial Analysis

    Microsoft first time ever announced quarter loss at 2012 2Q. That was due to 6,2 bn.$ Goodwill write-off. Such Goodwill comes from acquisitions, were company is bought for higher then its balance value. Companies with large Goodwill in their balance are at risk of such write-offs. This is basically including purchase expenses into companies Income statement from balance sheet. If excluded companies results does not look that bad. Revenue 18,1 bn.$ show slight increase by 5% an if excluded Goodwill write off Net income before depreciation would be 6,5 bn.$ also increased a bit if compared both to Q1 - 5,9 bn.$ and previous year Q2 - 6,4 bn.$. and that is a good sign.

    Income structure shows that companies main product Windows Revenue has decreased from 4,7 bn.$ to 4,1 bn.$, this is defiantly not a good sign, but hopes are in newly launching Windows8. Net income has also drooped from this vital segment from 2,9 bn.$ to 2,4 bn.$. This could signal that company is losing its market to net Apple iPad and other tablets, but company is launching its own tablet at the end of this year, so things could turn. Growth came from companies Business and server segments, this segment is the one that keeps companies small growth. Also surprisingly Entertainment segment is also increased its sales, but still remains a loss segments for Microsofts. Online services is very tiny - 0,7 bn.$ so Microsoft goal to compete with Google is far from reach also 6.2 bn.$ write-off was from this segment

    According to Windows share in desktop computers remain hard 92% and almost remain unchanged. But Desktop computers are losing ground to mobile technologies as Mobile device market is dubbing each year. In general companies results are average.

    Major change in balance is a decrease of Goodwill, other remain mainly unchanged. Equity level has decreased to 54% and is in good level. Return on asset was negative this quarter.

    Liquidity ratio remains good 2,6 due to large Cash and short term investment reserve - 63 bn.$ (~1/2 of total asset) which has increased from ~59 bn.$ since last quarter.

    Last 4 quarter Divident payments was 6,4 bn.$, share repurchase for 3,1 bn.$ in total Capital spending were 9,5 bn.$, that's 37% of 26 bn.$ generated Net income before depreciation and goodwill write-off, which is a good level. In general balance structure is acceptable.

    Share value:

    Equity / share65,8 bn.$8,381 bn.7,8 $/sh.
    Market value31$+23,2$7,5 years
    Year Net income before Depreciation26,0 bn.$*+3,1 $/sh.10,0%

    Companies share basic value has decreased to ~7,8$ (Δ-5%/8,2$ compared with Q1) due to write-offs. Current market price is~31$ (Δ-3,1%/32$) which shows that market is paying 23,2$ more or 7,5 years (7,7 years) of Net income before Depreciation earnings which is 26 bn.$, excluding 6,2 bn.$ write-off. Share evaluation remains quite high. Share profitability (Share market price/Net income before Depreciation) is 10,0% (Δ+0,1%/9,7%) which is a bit better then average and has increased a little bit due to reduced share number.

    Company announced that it will remain paying 0,2$/share a quarter dividend. Dividend yield is ~2,6% (2,5%) dividend yield which is a bit low. Dividend growth is not projected as companies generated profit is not growing and even decreasing a little bit. In general companies share value is a bit pricey and company further growth is questionable.

    Analysis source: Microsoft 2012 2Q Financial Results

    Previous analysis: Microsoft 2012 1Q financial analysis

    Tags: MSFT
    Aug 20 1:27 PM | Link | Comment!
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  • FB is continues to go down as could be predicted as this is not a investment share is a fashon investment not based on numbers
    Jun 3, 2012
  • FB reasonable price would be 11-12$ if evaluate like GOOG or AAPL shares are right now, so I expect it to go down further. Overexpectation
    May 29, 2012
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