Back to top

Analyst Blog

Intel Corp. (INTC - Analyst Report) is set to report first quarter 2013 results on Apr 16. Last quarter it posted a 6.67% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors t\This Past Quarter

Intel primarily sells chips, which are used in notebooks, netbooks and desktop computers. The transition to tablets and mobile devices has led to lower PC sales, which impacted the company’s results through 2012. We do not expect the personal computer market to return to normal growth rates any time soon.

This is quite evident from the data released last week by U.S. market research firm IDC. Per the data, first-quarter shipments of PCs fell 14% worldwide from last year, the steepest quarterly drop since 1994. Gartneralso pegged a decline of 11% for the same time period.

Therefore, with the changing dynamics, Intel has to increase efforts to move beyond the computer market. The company’s focus on producing chips for mobile Internet applications will likely account for most of Intel’s growth in the coming years. Also, the company’s focus on its fourth-generation core processors and new processors, which will be used to power ultrabooks and hybrid tablets might bring a sigh of relief in the latter half of the year.

Also, Intel’s plan for a TV service is a new step for the chip maker. But competition will remain fierce in this segment as many media firms as well as technology companies such as Apple (AAPL - Analyst Report), Microsoft (MSFT - Analyst Report) and Google(GOOG) are all vying for a share of the pie.

Earnings Whispers?

Our proven model does not conclusively show that Intel is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.

Zacks ESP:  Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 42 cents. Hence, the difference is 0.00%.

Zacks Rank #3 (Hold): Intel’s Zacks Rank #3  (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a ESP of 0.00% makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:  

Netflix Inc. (NFLX - Analyst Report), Earnings ESP of +5.56% and Zacks Rank #1 (Strong Buy)

Amazon.com (AMZN - Analyst Report), Earnings ESP of +190.0% and Zacks Rank #3 (Hold)

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%