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What's in the Offing for Intel (INTC) in Q2 Earnings?
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Intel Corporation (INTC - Free Report) is set to report second-quarter fiscal 2018 results on Jul 26 after the closing bell.
Notably, the company has a positive record of earnings surprises in the trailing four quarters, with an average surprise of 20.1%. In the last reported quarter, the company delivered a positive earnings surprise of 22.5%.
In the last reported quarter, the company delivered non-GAAP earnings of 87 cents per share, which beat the Zacks Consensus Estimate by 16 cents. The figure surged 31.8% from the year-ago quarter but declined 19.4% sequentially. Strong earnings growth was driven by better-than-expected top-line performance, operating margin expansion and lower effective tax-rate.
Revenues totaled $16.07 billion, up 8.6% year over year but down 5.8% quarter over quarter. The figure surpassed the Zacks Consensus Estimate of $15.03 billion. After adjusting for the McAfee (formerly Intel Security Group) transaction, revenues grew 13%.
Intel adopted new accounting standard that positively impacted the top line by $462 million in incremental revenues.
Guidance & Estimates
Following Intel’s announcement that Brian Krzanich has resigned as the CEO and also from its board of directors, the company raised second-quarter guidance.
Intel now envisions second-quarter fiscal 2018 revenues to come in at approximately $16.9 billion, up from the initial projection of $16.3 billion. The Zacks Consensus Estimate for revenues is currently pegged at $16.91 billion, reflecting year-over-year growth of 14.5%.
Earnings are now anticipated to be 99 cents per share, considerably higher than the previously estimated 85 cents per share. The Zacks Consensus Estimate for second-quarter 2018 earnings is pegged at 99 cents per share, reflecting year-over-year growth of 37.5%.
Let’s see how things are shaping up prior to this announcement.
Factors to Impact Q2 Results
Intel’s focus on data center, cloud, self-driving car and Internet of Things (IoT) are key growth drivers for the second quarter. The company is benefiting from robust performance of the Data Center Group (DCG), Internet-of-Things (IoT) Group, Non-Volatile Memory Solutions and Programmable Solutions Group.
These segments along with MobilEye form the crux of Intel’s data-centric business model, which contributed almost 30% of total revenues. DCG segment revenues gained from strong demand for high-performance products. Consequently, cloud computing, virtualization, enterprise upgrades and new products (Xeon Scalable) is likely to drive sales in the to-be reported quarter.
Management expects data-centric part of the business to grow in the high-single digits. Apart from strong on-going demand for public clouds, the company is also anticipated to benefit from strength in on-premise and hybrid cloud build-outs.
The Zacks Consensus Estimate for Data Center Group (“DCG”) is currently pegged at $4.60 billion higher than $4.42 billion in the year-ago quarter.
Further, Intel is focusing on strengthening foothold in the autonomous vehicles industry. The company has initiated testing of around 100 self-driving cars in Israel and is anticipated to expand trials in other geographies soon. Also, it recently collaborated with Mapbox, a mapping startup. This move bodes well for the company and should help it to stay ahead of competition from Qualcomm and NVIDIA.
Intel’s data center and cloud computing business are gaining traction and its focus on technology shift is expected to improve operating efficiency. Post the acquisition of Mobileye, Intel has a competitive advantage in the autonomous driving market. Moreover, the launch of the company’s 8th generation processors is a huge positive and will lend additional support to the company’s top and bottom lines.
Further, its partnerships with BMW, Nissan, Volkswagen AG, and Ferrari will boost sales of processing chips, sensor-chips, cloud software and many more, are expected to drive top-line growth in the soon-to-be reported quarter.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Intel has a Zacks Rank #1 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
Cypress Semiconductor Corporation has an Earnings ESP of +0.43% and a Zacks Rank #3.
Fortive Corporation (FTV - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
What's in the Offing for Intel (INTC) in Q2 Earnings?
Intel Corporation (INTC - Free Report) is set to report second-quarter fiscal 2018 results on Jul 26 after the closing bell.
Notably, the company has a positive record of earnings surprises in the trailing four quarters, with an average surprise of 20.1%. In the last reported quarter, the company delivered a positive earnings surprise of 22.5%.
In the last reported quarter, the company delivered non-GAAP earnings of 87 cents per share, which beat the Zacks Consensus Estimate by 16 cents. The figure surged 31.8% from the year-ago quarter but declined 19.4% sequentially. Strong earnings growth was driven by better-than-expected top-line performance, operating margin expansion and lower effective tax-rate.
Revenues totaled $16.07 billion, up 8.6% year over year but down 5.8% quarter over quarter. The figure surpassed the Zacks Consensus Estimate of $15.03 billion. After adjusting for the McAfee (formerly Intel Security Group) transaction, revenues grew 13%.
Intel adopted new accounting standard that positively impacted the top line by $462 million in incremental revenues.
Guidance & Estimates
Following Intel’s announcement that Brian Krzanich has resigned as the CEO and also from its board of directors, the company raised second-quarter guidance.
Intel now envisions second-quarter fiscal 2018 revenues to come in at approximately $16.9 billion, up from the initial projection of $16.3 billion. The Zacks Consensus Estimate for revenues is currently pegged at $16.91 billion, reflecting year-over-year growth of 14.5%.
Earnings are now anticipated to be 99 cents per share, considerably higher than the previously estimated 85 cents per share. The Zacks Consensus Estimate for second-quarter 2018 earnings is pegged at 99 cents per share, reflecting year-over-year growth of 37.5%.
Let’s see how things are shaping up prior to this announcement.
Factors to Impact Q2 Results
Intel’s focus on data center, cloud, self-driving car and Internet of Things (IoT) are key growth drivers for the second quarter. The company is benefiting from robust performance of the Data Center Group (DCG), Internet-of-Things (IoT) Group, Non-Volatile Memory Solutions and Programmable Solutions Group.
These segments along with MobilEye form the crux of Intel’s data-centric business model, which contributed almost 30% of total revenues. DCG segment revenues gained from strong demand for high-performance products. Consequently, cloud computing, virtualization, enterprise upgrades and new products (Xeon Scalable) is likely to drive sales in the to-be reported quarter.
Management expects data-centric part of the business to grow in the high-single digits. Apart from strong on-going demand for public clouds, the company is also anticipated to benefit from strength in on-premise and hybrid cloud build-outs.
The Zacks Consensus Estimate for Data Center Group (“DCG”) is currently pegged at $4.60 billion higher than $4.42 billion in the year-ago quarter.
Further, Intel is focusing on strengthening foothold in the autonomous vehicles industry. The company has initiated testing of around 100 self-driving cars in Israel and is anticipated to expand trials in other geographies soon. Also, it recently collaborated with Mapbox, a mapping startup. This move bodes well for the company and should help it to stay ahead of competition from Qualcomm and NVIDIA.
Intel’s data center and cloud computing business are gaining traction and its focus on technology shift is expected to improve operating efficiency. Post the acquisition of Mobileye, Intel has a competitive advantage in the autonomous driving market. Moreover, the launch of the company’s 8th generation processors is a huge positive and will lend additional support to the company’s top and bottom lines.
Further, its partnerships with BMW, Nissan, Volkswagen AG, and Ferrari will boost sales of processing chips, sensor-chips, cloud software and many more, are expected to drive top-line growth in the soon-to-be reported quarter.
Intel Corporation Price and EPS Surprise
Intel Corporation Price and EPS Surprise | Intel Corporation Quote
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Intel has a Zacks Rank #1 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
Yandex N.V. (YNDX - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cypress Semiconductor Corporation has an Earnings ESP of +0.43% and a Zacks Rank #3.
Fortive Corporation (FTV - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>