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Intel's EPS peaked in 2000 at $1.51. Last year Intel EPS were $.86, which was only significantly higher than in 2001, 2002 when it earned $0.19 and $0.46 respectively. In fact, Intel earned $0.86 back in 1998. Its average earnings during the last 10 years are $0.88.
But, what stands out about Intel when one examines its capital structure, are the stock buybacks.
Since 1991 Intel has earned $77.327 billion, of which $13.559 billion was from proceeds of stock options. In its history, Intel has paid out $8.589 billion in dividends and spend $55.569 billion buying back its own stock, or 3.052 billion adjusted shares at an average price of $18.21. As of 12/31/2006 there were 5.766 billion shares outstanding(excluding about 114 million in yet unexercised option grants.)
Since 1991, Intel has granted 1.740 billion stock option grants which at equivalent average repurchase price of $18.21 equals a staggering $29.6 Billion. Thus under FASB 123R(option expense), Intel's income would have been reduced by about $30 Billion, or 39%.
In a nutshell since 1991, Intel has spent 72% of its income buying back its own shares. There were about a total of 8,932 billion shares outstanding at some point, of which 34% were bought back while 18% were issued as option grants.
I don't see how an investor can make any money buying Intel. The stock is grossly overpriced and the company is engaged in some kind of stock pyramid scheme.
Edited by linrom1, 11 July 2007 - 12:31 AM.
