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Intel (INTC) Down 2.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Intel (INTC - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Intel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Intel Surpasses Earnings & Revenue Estimates in Q4
Intel reported fourth-quarter 2021 non-GAAP earnings of $1.09 per share, which beat the Zacks Consensus Estimate by 21.1% but declined 26.4% year over year.
GAAP revenues were $20,528 million, up 2.8% year over year. Non-GAAP revenues totaled $19,532 million, up 3.5% year over year. The top line surpassed the consensus estimate by 6.7%.
Intel’s fourth-quarter revenues were driven by a record quarter for the Data Center Group (DCG), with strong server recovery in enterprise and government. The Internet of Things Group had a record quarter, reflecting strong demand on recovery from COVID-19 impacts. The Client Computing Group (CCG) delivered another $10 billion quarter.
Quarterly Segment Details
CCG (49.4% of total revenues) revenues were down 7.4% year over year to $10,133 million. Lower notebook volumes due to component shortage hurt top-line growth. Platform revenues decreased 5.3% year over year to $9,408 million. Adjacent revenues plunged 27.5% from the year-ago quarter to $725 million. Notebook platform volumes declined 26% year over year but increased 4% sequentially. Desktop platform volumes increased 7% year over year and 15% from the prior quarter. Notebook’s average selling price (ASP) increased 14% year over year. Desktop ASP jumped 11%.
DCG (35.6%) revenues increased 20% year over year to $7,306 million. Platform revenues were up 21.6% to $6,442 million. Adjacent revenues grew 9.2% to $864 million. DCG platform unit volumes were up 17% year over year and 8% sequentially. ASP increased 4% year over year and 3% sequentially.
Internet of Things (6.8%) revenues increased 27.4% year over year to $1,414 million. IOTG revenues soared 36.2% to $1,058 million. Mobileye revenues grew 6.9% on a year-over-year basis to $356 million, driven by improvement in global vehicle production. Intel announced strategic global partnerships with ZEEKR and Sixt SE, and additional plans to unveil Mobileye’s robotaxi equipped with the Mobileye Drive system during the reported quarter.
Non-Volatile Memory Solutions Group (“NSG”) (4.9%) revenues declined 17.5% year over year to $996 million on lower ASPs.
Programmable Solutions Group (“PSG”) (2.4%) revenues increased 14.7% from the year-ago quarter to $484 million.
Intel has a residual segment, All Other (0.9%), which includes results of operations from other adjustments. The segment reported revenues of $195 million, down 7.6% year over year.
Quarterly Operating Details
Non-GAAP gross margin was 55.4%, down 460 basis points (bps) on a year-over-year basis. Non-GAAP research and development and marketing, general and administrative expenses increased to $5.8 billion from $5.2 billion. Non-GAAP operating margin contracted 650 bps year over year to 25.9%.
CCG operating income was down 22.9% year over year to $3,475 million. DCG operating income was down 16.9% to $1,726 million. Internet of Things operating income amounted to $369 million compared with $233 million in the year-ago quarter. Mobileye’s operating income was $105 million compared with $47 million a year ago. NSG operating income was $354 million, up from $76 million. PSG operating income was $51 million, increasing from $43 million. The All Other segment reported a loss of $986 million compared with a loss of $1,053 million a year ago.
Cash Flow & Liquidity
As of Dec 25, 2021, Intel had cash and cash equivalents of $4,827 million, with $33,510 million of debt. The company generated $29,991 million of cash from operations in 2021 compared with $35,384 million in 2020.
In full-year 2021, the company paid dividends of $5.6 billion and used $2.4 billion to repurchase 39.5 million shares.
Outlook
For the first quarter of 2022, Intel expects non-GAAP revenues to be around $18.3 billion. Non-GAAP gross margin is estimated to be 52%. Non-GAAP earnings are expected to be 80 cents per share. Non-GAAP tax rate is likely to be 15%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.52% due to these changes.
VGM Scores
At this time, Intel has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Intel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Intel (INTC) Down 2.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Intel (INTC - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Intel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Intel Surpasses Earnings & Revenue Estimates in Q4
Intel reported fourth-quarter 2021 non-GAAP earnings of $1.09 per share, which beat the Zacks Consensus Estimate by 21.1% but declined 26.4% year over year.
GAAP revenues were $20,528 million, up 2.8% year over year. Non-GAAP revenues totaled $19,532 million, up 3.5% year over year. The top line surpassed the consensus estimate by 6.7%.
Intel’s fourth-quarter revenues were driven by a record quarter for the Data Center Group (DCG), with strong server recovery in enterprise and government. The Internet of Things Group had a record quarter, reflecting strong demand on recovery from COVID-19 impacts. The Client Computing Group (CCG) delivered another $10 billion quarter.
Quarterly Segment Details
CCG (49.4% of total revenues) revenues were down 7.4% year over year to $10,133 million. Lower notebook volumes due to component shortage hurt top-line growth. Platform revenues decreased 5.3% year over year to $9,408 million. Adjacent revenues plunged 27.5% from the year-ago quarter to $725 million. Notebook platform volumes declined 26% year over year but increased 4% sequentially. Desktop platform volumes increased 7% year over year and 15% from the prior quarter. Notebook’s average selling price (ASP) increased 14% year over year. Desktop ASP jumped 11%.
DCG (35.6%) revenues increased 20% year over year to $7,306 million. Platform revenues were up 21.6% to $6,442 million. Adjacent revenues grew 9.2% to $864 million. DCG platform unit volumes were up 17% year over year and 8% sequentially. ASP increased 4% year over year and 3% sequentially.
Internet of Things (6.8%) revenues increased 27.4% year over year to $1,414 million. IOTG revenues soared 36.2% to $1,058 million. Mobileye revenues grew 6.9% on a year-over-year basis to $356 million, driven by improvement in global vehicle production. Intel announced strategic global partnerships with ZEEKR and Sixt SE, and additional plans to unveil Mobileye’s robotaxi equipped with the Mobileye Drive system during the reported quarter.
Non-Volatile Memory Solutions Group (“NSG”) (4.9%) revenues declined 17.5% year over year to $996 million on lower ASPs.
Programmable Solutions Group (“PSG”) (2.4%) revenues increased 14.7% from the year-ago quarter to $484 million.
Intel has a residual segment, All Other (0.9%), which includes results of operations from other adjustments. The segment reported revenues of $195 million, down 7.6% year over year.
Quarterly Operating Details
Non-GAAP gross margin was 55.4%, down 460 basis points (bps) on a year-over-year basis. Non-GAAP research and development and marketing, general and administrative expenses increased to $5.8 billion from $5.2 billion. Non-GAAP operating margin contracted 650 bps year over year to 25.9%.
CCG operating income was down 22.9% year over year to $3,475 million. DCG operating income was down 16.9% to $1,726 million. Internet of Things operating income amounted to $369 million compared with $233 million in the year-ago quarter. Mobileye’s operating income was $105 million compared with $47 million a year ago. NSG operating income was $354 million, up from $76 million. PSG operating income was $51 million, increasing from $43 million. The All Other segment reported a loss of $986 million compared with a loss of $1,053 million a year ago.
Cash Flow & Liquidity
As of Dec 25, 2021, Intel had cash and cash equivalents of $4,827 million, with $33,510 million of debt. The company generated $29,991 million of cash from operations in 2021 compared with $35,384 million in 2020.
In full-year 2021, the company paid dividends of $5.6 billion and used $2.4 billion to repurchase 39.5 million shares.
Outlook
For the first quarter of 2022, Intel expects non-GAAP revenues to be around $18.3 billion. Non-GAAP gross margin is estimated to be 52%. Non-GAAP earnings are expected to be 80 cents per share. Non-GAAP tax rate is likely to be 15%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.52% due to these changes.
VGM Scores
At this time, Intel has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Intel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.