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Intel (INTC) To Report Q1 Earnings: What's in the Offing?

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Intel (INTC - Free Report) is scheduled to report first-quarter 2021 results on Apr 22, 2021.

For first-quarter 2021, Intel expects non-GAAP revenues of $17.5 billion. The Zacks Consensus Estimate for revenues is pegged at $18.01 billion, indicating a decline of 9.2% from the year-ago quarter.

In the first quarter, PC-centric business is anticipated to improve in low-single digits on a year-over-year basis, while data-centric business is projected to decline approximately 25% year over year. Intel anticipates momentum in consumer notebook PCs to have continued in the first quarter, led by remote working and online trends.

For the first quarter, Intel expects non-GAAP earnings to be $1.10 per share. The Zacks Consensus Estimate for earnings is pegged at $1.15, stable in the past seven days. The figure suggests fall of 20.7% from the prior-year reported figure.

Notably, the company has beat earnings estimate in each of the trailing four quarters, the average surprise being 15.8%.

Factors Likely To Have Influenced Q1 Results

Coronavirus-induced work-from-home and online learning wave may have bolstered sales of processors utilized in enterprise laptops and data center servers. This, in turn, is anticipated to get reflected in first-quarter revenues.

Notably, encouraging trend in PC shipments in the first quarter, driven by increased demand and improvement in the supply chain, is likely to have contributed to Intel’s Client Computing Group (CCG) segment revenues. Per IDC data, PC shipments in first-quarter 2021 improved 55.2% year over year to 84 million units.

Moreover, robust adoption of Xeon processors, which are integrated with Optane DC Persistent Memory solution, may have contributed to the top line in the quarter to be reported. Strong momentum for 10 nanometer (nm) mobile CPU bodes well.

Likewise, incremental adoption of latest Core vPro and Lakefield processors, and Tiger Lake series offerings is likely to get reflected in the to-be-reported quarter’s revenues.

Intel Corporation Price and EPS Surprise

Intel Corporation Price and EPS Surprise

Intel Corporation price-eps-surprise | Intel Corporation Quote

Further, higher Wi-Fi and modem sales and solid notebook demand remain tailwinds. Notably, Intel’s Optane DC Persistent Memory modules are being leveraged by the likes of Oracle (ORCL - Free Report) , SAP, Google, Microsoft (MSFT - Free Report) , Baidu and Alibaba.

Also, the chipmaker’s non-volatile memory business might have gained from improvement in Optane bit growth.

However, sluggish data center demand across enterprise and government end-markets due to coronavirus crisis induced weakness in data-centric businesses is likely to have weighed on Intel’s first-quarter performance.

Nevertheless, Mobileye’s new design wins and increasing proliferation of IoT and stabilizing automotive industry may have contributed to Intel’s fourth-quarter performance. Growing clout of Mobileye’s SuperVision surround-view advanced driver-assistance system (ADAS) in premium electric vehicles (EV) bodes well.

Additionally, growing adoption of cloud-based solutions, across mobile compute, and network infrastructure for 5G, triggered by momentum in coronavirus crisis-induced work-from-home wave, might have cushioned the anticipated decline.

Nonetheless, sluggishness across Intel’s Internet of Things Group (IOTG) end markets, especially retail and industrial, is likely to have affected revenues in the quarter under review.

Moreover, growing clout of Advanced Micro Devices’ (AMD - Free Report) second generation of its EPYC server processors may have led to pricing pressure and limited margin expansion.

Also, increasing expenses on accelerated ramp up of 10 nm products and improvement in 7 nm production are anticipated to have hindered on first-quarter profitability.

Intel currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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