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Will Top-Line Contraction Dent Intel (INTC) Q3 Earnings?
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Intel Corporation (INTC - Free Report) is scheduled to report third-quarter 2022 results on Oct 27 after the closing bell. In the last reported quarter, the company delivered an earnings surprise of a negative 58%. It pulled off a trailing four-quarter earnings surprise of 6.5%, on average.
The Santa Clara, CA-based semiconductor company is expected to have recorded year-over-year lower revenues due to a fall in sales in the Client Computing Group and Datacenter and AI Group.
Factors at Play
In the third quarter, Intel launched the first set of open-source AI reference kits that make AI more accessible to organizations in on-prem, cloud and edge environments. The kits enable data scientists and developers to deploy AI faster and more easily across healthcare, manufacturing, retail and other industries with higher accuracy for improved performance at lower cost of implementation. This is likely to get reflected in the upcoming results.
During the to-be-reported quarter, MediaTek inked an agreement with Intel to manufacture chips using Intel Foundry Services’ advanced process technologies. Leveraging Intel process technologies that are optimized for high performance and low power consumption, MediaTek aims to manufacture multiple chips for a range of smart edge devices. This is likely to have generated incremental revenues in the quarter.
However, dwindling PC sales, supply chain adversities and an uncertain macroeconomic environment remain an overhang on the company’s top-line performance. To improve the sagging chip sales, the company unveiled the 13th-Generation Intel Core Processor. The top-of-the-line version of the chip, the Core i9-13900K, is reportedly the fastest desktop processor (with a top speed of 5.8Ghz) with 24 processing cores that are broken down into eight performance cores and 16 efficiency cores. Leveraging Intel 7 process and x86 performance hybrid architecture, the chip enables up to 15% better single-threaded performance and up to 41% better multi-threaded performance per company standards.
Intel is witnessing intensifying competition in the server, storage and networking markets. The Advanced RISC Machines is posing a challenge in the fast-growing micro-server segment, and its designs have been adopted by several competitors. Delay in 7nm process-based chips is also a major concern. The consensus estimate for Client Computing Group stands at $8,082 million, which indicates a decline from $9,664 million reported a year ago, while that for Datacenter and AI Group is $5,084 million, down from $6,496 million.
For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $15,491 million, which indicates a decline from the year-ago quarter’s reported figure of $19,192 million. The consensus estimate for adjusted earnings per share stands at 34 cents, suggesting a sharp decline from $1.71 reported in the prior year.
Earnings Whispers
Our proven model does not predict an earnings beat for Intel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.21%, with the former pegged at 33 cents and the latter at 34 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Intel currently has a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for NETGEAR, Inc. (NTGR - Free Report) is +8.00% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Oct 26.
The Earnings ESP for Apple Inc. (AAPL - Free Report) is +0.89% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 27.
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Will Top-Line Contraction Dent Intel (INTC) Q3 Earnings?
Intel Corporation (INTC - Free Report) is scheduled to report third-quarter 2022 results on Oct 27 after the closing bell. In the last reported quarter, the company delivered an earnings surprise of a negative 58%. It pulled off a trailing four-quarter earnings surprise of 6.5%, on average.
The Santa Clara, CA-based semiconductor company is expected to have recorded year-over-year lower revenues due to a fall in sales in the Client Computing Group and Datacenter and AI Group.
Factors at Play
In the third quarter, Intel launched the first set of open-source AI reference kits that make AI more accessible to organizations in on-prem, cloud and edge environments. The kits enable data scientists and developers to deploy AI faster and more easily across healthcare, manufacturing, retail and other industries with higher accuracy for improved performance at lower cost of implementation. This is likely to get reflected in the upcoming results.
During the to-be-reported quarter, MediaTek inked an agreement with Intel to manufacture chips using Intel Foundry Services’ advanced process technologies. Leveraging Intel process technologies that are optimized for high performance and low power consumption, MediaTek aims to manufacture multiple chips for a range of smart edge devices. This is likely to have generated incremental revenues in the quarter.
However, dwindling PC sales, supply chain adversities and an uncertain macroeconomic environment remain an overhang on the company’s top-line performance. To improve the sagging chip sales, the company unveiled the 13th-Generation Intel Core Processor. The top-of-the-line version of the chip, the Core i9-13900K, is reportedly the fastest desktop processor (with a top speed of 5.8Ghz) with 24 processing cores that are broken down into eight performance cores and 16 efficiency cores. Leveraging Intel 7 process and x86 performance hybrid architecture, the chip enables up to 15% better single-threaded performance and up to 41% better multi-threaded performance per company standards.
Intel is witnessing intensifying competition in the server, storage and networking markets. The Advanced RISC Machines is posing a challenge in the fast-growing micro-server segment, and its designs have been adopted by several competitors. Delay in 7nm process-based chips is also a major concern. The consensus estimate for Client Computing Group stands at $8,082 million, which indicates a decline from $9,664 million reported a year ago, while that for Datacenter and AI Group is $5,084 million, down from $6,496 million.
For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $15,491 million, which indicates a decline from the year-ago quarter’s reported figure of $19,192 million. The consensus estimate for adjusted earnings per share stands at 34 cents, suggesting a sharp decline from $1.71 reported in the prior year.
Earnings Whispers
Our proven model does not predict an earnings beat for Intel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.21%, with the former pegged at 33 cents and the latter at 34 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel currently has a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Arista Networks, Inc. (ANET - Free Report) is set to release quarterly numbers on Oct 31. It has an Earnings ESP of +1.27% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for NETGEAR, Inc. (NTGR - Free Report) is +8.00% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Oct 26.
The Earnings ESP for Apple Inc. (AAPL - Free Report) is +0.89% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 27.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.