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Will Top-Line Contraction Affect Intel's (INTC) Q2 Earnings?
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Intel Corporation (INTC - Free Report) is scheduled to report second-quarter 2022 results on Jul 28, after the market closes. In the last reported quarter, the company delivered an earnings surprise of 8.8%. It pulled off a trailing four-quarter earnings surprise of 26.2%, 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 Data Center Group.
Factors at Play
In the second quarter, Intel announced a significant advancement in its integrated photonic research − the next frontier in increasing communication bandwidth between computer silicon in data centers and across networks. This advancement will enable the production of the optical source with the required performance for future high-volume applications such as co-packaged optics and optical compute interconnect for emerging network-intensive workloads, including artificial intelligence and machine learning. This is likely to be reflected in the upcoming results.
Mobileye, a segment of Intel, in the second quarter, launched its first software development kit (SDK) for the EyeQ system-on-chip that powers driver assistance and future autonomous technologies for automakers worldwide. With this, EyeQ aims to reduce development costs, accelerate time to market and enable hardware vendor flexibility for the full development cycle starting from conception to deployment and performance tuning. The consensus estimate for revenues from Mobileye stands at $393 million, which implies an increase from $327 million reported a year ago.
Intel is witnessing intensifying competition in the server, storage, and networking markets. The Advanced RISC Machines (ARM) 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 company detected a defect mode in 7nm, which caused yield degradation. The company expects initial production shipments of Intel-based 7nm client CPU in late 2022 or early 2023. The consensus estimate for Client Computing Group stands at $8,760 million, which indicates a decline from $10,109 million reported a year ago, while that for Data Center Group is $6,191 million, down from $6,455 million.
For the June quarter, the Zacks Consensus Estimate for total revenues is pegged at $17,934 million, which indicates a decline of 8.6% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share stands at 74 cents, suggesting a fall of 42.2% year over year.
What Our Model Says
Our proven model doesn’t conclusively predict an earnings beat for Intel this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Intel’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at -8.11%, with the former pegged at 68 cents and the latter at 74 cents.
Zacks Rank: Intel currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
EQT Corporation (EQT - Free Report) is scheduled to release second-quarter 2022 results on Jul 27. EQT Corporation has an Earnings ESP of +3.22% and a Zacks Rank #2.
WEX Inc. (WEX - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #2. WEX is set to report second-quarter 2022 results on Jul 28.
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Will Top-Line Contraction Affect Intel's (INTC) Q2 Earnings?
Intel Corporation (INTC - Free Report) is scheduled to report second-quarter 2022 results on Jul 28, after the market closes. In the last reported quarter, the company delivered an earnings surprise of 8.8%. It pulled off a trailing four-quarter earnings surprise of 26.2%, 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 Data Center Group.
Factors at Play
In the second quarter, Intel announced a significant advancement in its integrated photonic research − the next frontier in increasing communication bandwidth between computer silicon in data centers and across networks. This advancement will enable the production of the optical source with the required performance for future high-volume applications such as co-packaged optics and optical compute interconnect for emerging network-intensive workloads, including artificial intelligence and machine learning. This is likely to be reflected in the upcoming results.
Mobileye, a segment of Intel, in the second quarter, launched its first software development kit (SDK) for the EyeQ system-on-chip that powers driver assistance and future autonomous technologies for automakers worldwide. With this, EyeQ aims to reduce development costs, accelerate time to market and enable hardware vendor flexibility for the full development cycle starting from conception to deployment and performance tuning. The consensus estimate for revenues from Mobileye stands at $393 million, which implies an increase from $327 million reported a year ago.
Intel is witnessing intensifying competition in the server, storage, and networking markets. The Advanced RISC Machines (ARM) 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 company detected a defect mode in 7nm, which caused yield degradation. The company expects initial production shipments of Intel-based 7nm client CPU in late 2022 or early 2023. The consensus estimate for Client Computing Group stands at $8,760 million, which indicates a decline from $10,109 million reported a year ago, while that for Data Center Group is $6,191 million, down from $6,455 million.
For the June quarter, the Zacks Consensus Estimate for total revenues is pegged at $17,934 million, which indicates a decline of 8.6% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share stands at 74 cents, suggesting a fall of 42.2% year over year.
What Our Model Says
Our proven model doesn’t conclusively predict an earnings beat for Intel this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Intel’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at -8.11%, with the former pegged at 68 cents and the latter at 74 cents.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Hess Corporation (HES - Free Report) is slated to release second-quarter 2022 results on Jul 27. Hess Corporation has an Earnings ESP of +3.73% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
EQT Corporation (EQT - Free Report) is scheduled to release second-quarter 2022 results on Jul 27. EQT Corporation has an Earnings ESP of +3.22% and a Zacks Rank #2.
WEX Inc. (WEX - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #2. WEX is set to report second-quarter 2022 results on Jul 28.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.