Re: Okay, let's wait until we get Intel's report next month. Then we can compare shareholder equity per share between Q2 and Q3, add in the dividends, and figure out exactly how much the earnings mean to a shareholder.
Shareholder equity is just the difference between assets and liabilities. Wall Street has told Intel that they have been getting cash heavy and that they should invest in things that would actually increase shareholder value. This includes stock buybacks to reduce the number of outstanding shares. Sure, some of the buybacks go towards employee compensation, but quite a bit has gone to increase share value, too. If you look at the number of diluted shares outstanding during the last 5 years, Intel has decreased this through stock buyback by almost half a billion shares (actual figures: 2000 - 6,986M; 2004 - 6,494M). And during this time, shareholder equity has remained fairly constant (actual figures: 2000 - $37,322M; 2004 - $38,579M). And if you look at all their financial figures, Intel is almost where they were at the peak of their success:
2000 vs. 2004
Net Revenue: $33,726M -> $34,209M
Gross Margin: $21,076M -> $19,746M
Operating Income: $10,395 -> $10,130M
Net Income: $10,535 -> $7,516M
The only difference is that now Intel is investing more than ever in future technology:
R&D: $3,897M -> $4,778M
Which makes them an even more powerful force than where they were 5 years ago. I think after the stock adjusted to reasonable values after the .com implosion, shareholders began getting cold feet about reinvesting in Intel. They still see commoditization on the horizon and competitive issues holding back margins. I think most of these concerns are overblown, and that 2005 figures will be even better than 2004, across the board. 2006 will continue this trend, and eventually the share price will reflect the constant growth.
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