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Financial Analysis of Intel

United States
Worldwide

I just need to add a conclusion to this analysis.

Intel Group Project-Analysis

United States
Worldwide

Founded in 1968, Intel Corporation now employees an estimated 99,900 employees in 294 worldwide offices and facilities. For decades, Intel Corporation has developed technology enabling the computer and Internet revolution that has changed the world. Their first commercial product was the 3101 Schottky bipolar 64-bit static random access memory (SRAM) chip, and it was moderately successful. Initially formed to build semiconductor memory products, Intel introduced the world's first microprocessor in 1971. Intel was a company founded on the risk/reward principle and still firmly believes in it today. In the early 70's a new client of Intel from Japan, Busicom, wanted Intel to design 12 custom chips for their calculators. Intel accepted the contract knowing that they did not have the resources or manpower to do the job. Intel engineer Ted Hoff had the idea of designing one chip that could function as 12. Robert Noyce and Gordon Moore, founders of Intel Corporation, embraced Hoff's solution and decided to fund the chip's development. If successful this chip could be programmed to take instructions. This meant intelligence could be programmed by software instead of the method of burning it into hardware, thus saving time and money. After 9 months of development, Intel introduced the world's first microprocessor, the 4004. It measured 1/8 inch wide by 1/6 inch long and consisted of 2,300 transistors. The little microprocessor had as much computing power as the ENIAC (Electronic Numerical Integrator and Computer), which had filled 3,000 cubic feet with 18,000 vacuum tubes in 1946. While the 4004 had just 2,300 transistors, the current Pentium Pro processor has 5.5 million transistors. Intel changed history by making programmable intelligence (the microprocessor) so inexpensive it could be embedded into household appliances and so powerful, people could have their very own PCs. Intelligently, Intel decided to pursue this microprocessor production and shift most of its resources from memory products to computer chips Today, Intel the world's largest chip maker is also a leading manufacturer of computer, networking, and communications products.

United States
Worldwide

Intel's 2004 Annual Report shows the year ended with double-digit revenue gains, and a strong demand for Intel architecture products across all geographies. Their new products, global presence and investments in manufacturing capacity allowed them to post record revenue for 2004 of $34.2 billion, up 13.5% from 2003 and net income for 2004 was $7.5 billion, up 33% from 2003.Record cash dividends were paid we paid and$7.5 billion was used to repurchase 301 million shares of common stock. 2003 ended with substantial improvements in revenue and profit over 2002. Revenue of $30.1 billion was up 13% over 2002, with net income of $5.6 billion, up 81% over2002. $3.7 billion was spent on capital assets, mostly factories and equipment and there .was $4.4 billion in research and development expenses. Even with the challenges in their Wireless Communications and Computing Group resulting in a $611 million goodwill write-off, 2003 operating income of $7.5 billion was up 72% from 2002. The Intel 2002 Annual Report shows net revenue of $26.8 billion. There wasn't much gain compared to the $26.5 billion in revenue for 2001. Net income was $3.1 billion for 2002, which was up 141% from 2001.

Financial Statements

Intel Corp. (INTC) On Feb 17: 20.61 0.74 (3.47%)

Income Statement

Annual Data |
All numbers in thousands
PERIOD ENDING 25-Dec-04 27-Dec-03 28-Dec-02
Total Revenue 34,209,000 30,141,000 26,764,000
Cost of Revenue 14,463,000 13,047,000 13,446,000

Gross Profit 19,746,000 17,094,000 13,318,000

Operating Expenses
Research Development 4,778,000 4,360,000 4,034,000
Selling General and Administrative 4,659,000 4,278,000 4,334,000
Non Recurring - 622,000 20,000
Others 179,000 301,000 548,000

Total Operating Expenses - 9,561,000 8,936,000

Operating Income or Loss 10,130,000 7,533,000 4,382,000

Income from Continuing Operations
Total Other Income/Expenses Net 337,000 (29,000) (94,000)
Earnings Before Interest And Taxes 10,467,000 7,504,000 4,288,000
Interest Expense 50,000 62,000 84,000
Income Before Tax 10,417,000 7,442,000 4,204,000
Income Tax Expense 2,901,000 1,801,000 1,087,000
Minority Interest - - -

Net Income From Continuing Ops 7,516,000 5,641,000 3,117,000

Non-recurring Events
Discontinued Operations - - -
Extraordinary Items - - -
Effect Of Accounting Changes - - -
Other Items - - -

Net Income 7,516,000 5,641,000 3,117,000
Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $7,516,000 $5,641,000 $3,117,000

http://finance.yahoo.com/q/is?s=INTC&annual

Intel Corp. (INTC)

Cash Flow

Annual Data |

PERIOD ENDING 25-Dec-04 27-Dec-03 28-Dec-02
Net Income 7,516,000 5,641,000 3,117,000

Operating Activities, Cash Flows Provided By or Used In
Depreciation 4,889,000 5,070,000 5,344,000
Adjustments To Net Income 230,000 1,729,000 1,073,000
Changes In Accounts Receivables (39,000) (430,000) 30,000
Changes In Liabilities 956,000 31,000 56,000
Changes In Inventories (101,000) (245,000) (26,000)
Changes In Other Operating Activities (332,000) (281,000) (465,000)

Total Cash Flow From Operating Activities 13,119,000 11,515,000 9,129,000

Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures (3,843,000) (3,656,000) (4,703,000)
Investments (985,000) (3,174,000) (675,000)
Other Cashflows from Investing Activities (204,000) (260,000) (387,000)

Total Cash Flows From Investing Activities (5,032,000) (7,090,000) (5,765,000)

Financing Activities, Cash Flows Provided By or Used In
Dividends Paid (1,022,000) (524,000) (533,000)
Sale Purchase of Stock (6,622,000) (3,045,000) (3,333,000)
Net Borrowings (7,000) (289,000) (64,000)
Other Cash Flows from Financing Activities - - -

Total Cash Flows From Financing Activities (7,651,000) (3,858,000) (3,930,000)
Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $436,000 $567,000 ($566,000)

http://finance.yahoo.com/q/is?s=INTC&annual

Intel Corp. (INTC)
Balance Sheet

Annual Data |

PERIOD ENDING 25-Dec-04 27-Dec-03 28-Dec-02

Assets
Current Assets
Cash And Cash Equivalents 11,518,000 10,596,000 7,404,000
Short Term Investments 5,654,000 5,568,000 5,183,000
Net Receivables 3,978,000 3,929,000 3,710,000
Inventory 2,621,000 2,519,000 2,276,000
Other Current Assets 287,000 270,000 352,000

Total Current Assets 24,058,000 22,882,000 18,925,000
Long Term Investments 3,219,000 2,380,000 1,234,000
Property Plant and Equipment 15,768,000 16,661,000 17,847,000
Goodwill 3,719,000 3,705,000 4,330,000
Intangible Assets 677,000 659,000 1,888,000
Accumulated Amortization - - -
Other Assets 702,000 856,000 -
Deferred Long Term Asset Charges - - -

Total Assets 48,143,000 47,143,000 44,224,000

Liabilities
Current Liabilities
Accounts Payable 7,213,000 6,022,000 5,684,000
Short/Current Long Term Debt 201,000 224,000 436,000
Other Current Liabilities 592,000 633,000 475,000

Total Current Liabilities 8,006,000 6,879,000 6,595,000
Long Term Debt 703,000 936,000 929,000
Other Liabilities - - -
Deferred Long Term Liability Charges 855,000 1,482,000 1,232,000
Minority Interest - - -
Negative Goodwill - - -

Total Liabilities 9,564,000 9,297,000 8,756,000

Stockholders' Equity
Misc Stocks Options Warrants - - -
Redeemable Preferred Stock - - -
Preferred Stock - - -
Common Stock 6,143,000 6,754,000 7,641,000
Retained Earnings 32,288,000 31,016,000 27,847,000
Treasury Stock - - -
Capital Surplus - - -
Other Stockholder Equity 148,000 76,000 (20,000)

Total Stockholder Equity 38,579,000 37,846,000 35,468,000

Net Tangible Assets $34,183,000 $33,482,000 $29,250,000

http://finance.yahoo.com/q/is?s=INTC&annual

FINANCIAL RATIO ANALYSIS
{Include Financial Analysis information}

INDUSTRY COMPARATIVE ANALYSIS

The semiconductor industry has traditionally been characterized by swift change, hefty capital investments, and high risk. It is highly consolidated, with just a handful of companies in a few countries supplying the majority of industry output. High technological requirements, massive capital investments related to research and production facilities, and entrenched market leaders generally discourage new entrants to the industry. However, leaps in technology in recent years made by the industry's market leaders opened the door to new manufacturers who specialized in commodity products and helped to satisfy increased customer demand.

On average, the semiconductor industry has had a growth rate of 17 percent per annum since 1959. In 1990, global sales hit a then record US$50.5 billion. Five years later, sales had tripled to US$144.4 billion, and in 2000 sales reached US$204.0 billion. By 2004, after the sharp economic downturn in the early years of the decade, global sales topped $200 billion for the first time since 2000. As reported in CMR, semiconductor sales for 2004 were US$227.246 billion. Of that total, 13 percent was earned by industry leader Intel. World semiconductor shipments were expected to continue rising into the late 2000s, as the rapid expansion of the telecommunications industry continued to create more demand for semiconductors, used in devices for networking and wireless communications. The rapid increase in the use of digital technologies and the world's appetite for electronic devices assured that robust growth would continue to characterize the industry.

According to the Semiconductor Industry Association (SIA), the industry was valued at US$166 billion worldwide in 2003. The United States accounted for US$80 billion of this total, of which nearly three-fourths was attributed to international sales. The semiconductor industry was distinguished from many other growth industries by its extreme emphasis on technology, an emphasis that served as a major entry barrier to potential competitors. Companies that concentrated on proprietary technology had to risk massive capital investments to drive the research and development (R&D) machines that generate new semiconductor designs. Likewise, entities and nations that concentrated on the production or commodity side of the industry needed to invest heavily to develop sophisticated, complex manufacturing operations.

Industry Leaders
o Intel Corporation
o Samsung Electronics
o Texas Instruments

Industry Comparative Analysis
Company Intel
2003 Samsung Electronics
2003
Texas Instruments
2003
Intel
2004 Samsung Electronics
Texas Instruments
2004

Industry Ranking
Debt/Equity (%)
Current Ratio
ROI
ROE
Price Earnings Ratio

Conclusion

Solution Preview

United States
Worldwide

I just need to add a conclusion to this analysis.

Intel Group Project-Analysis

United States
Worldwide

Founded in 1968, Intel Corporation now employees an estimated 99,900 employees in 294 worldwide offices and facilities. For decades, Intel Corporation has developed technology enabling the computer and Internet revolution that has changed the world. Their first commercial product was the 3101 Schottky bipolar 64-bit static random access memory (SRAM) chip, and it was moderately successful. Initially formed to build semiconductor memory products, Intel introduced the world's first microprocessor in 1971. Intel was a company founded on the risk/reward principle and still firmly believes in it today. In the early 70's a new client of Intel from Japan, Busicom, wanted Intel to design 12 custom chips for their calculators. Intel accepted the contract knowing that they did not have the resources or manpower to do the job. Intel engineer Ted Hoff had the idea of designing one chip that could function as 12. Robert Noyce and Gordon Moore, founders of Intel Corporation, embraced Hoff's solution and decided to fund the chip's development. If successful this chip could be programmed to take instructions. This meant intelligence could be programmed by software instead of the method of burning it into hardware, thus saving time and money. After 9 months of development, Intel introduced the world's first microprocessor, the 4004. It measured 1/8 inch wide by 1/6 inch long and consisted of 2,300 transistors. The little microprocessor had as much computing power as the ENIAC (Electronic Numerical Integrator and Computer), which had filled 3,000 cubic feet with 18,000 vacuum tubes in 1946. While the 4004 had just 2,300 transistors, the current Pentium Pro processor has 5.5 million transistors. Intel changed history by making programmable intelligence (the microprocessor) so inexpensive it could be embedded into household appliances and so powerful, people could have their very own PCs. Intelligently, Intel decided to pursue this microprocessor production and shift most of its resources from memory products to computer chips Today, Intel the world's largest chip maker is also a leading manufacturer of computer, networking, and communications products.

United States
Worldwide

Intel's 2004 Annual Report shows the year ended with double-digit revenue gains, and a strong demand for Intel architecture products across all geographies. Their new products, global presence and investments in manufacturing capacity allowed them to post record revenue for 2004 of $34.2 billion, up 13.5% from 2003 and net income for 2004 was $7.5 billion, up 33% from 2003.Record cash dividends were paid we paid and$7.5 billion was used to repurchase 301 million shares of common stock. 2003 ...

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