We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Intel (INTC) to Report Q1 Earnings: What's in the Cards?
Read MoreHide Full Article
Intel Corp (INTC - Free Report) is set to report first-quarter 2017 results on Apr 27, after the closing bell. Notably, the company has positive record of earnings surprises in the trailing four quarters, with an average surprise of 9.11%.
Last quarter, the company posted a positive earnings surprise of 5.33%. Non-GAAP earnings of 79 cents per share increased almost 4% from the year-ago quarter but declined 1.3% sequentially.
Strong year-over-year earnings growth was driven by 9.8% increase in revenues, which totaled $16.37 billion and comfortably surpassed the Zacks Consensus Estimate of nearly $15.80 billion. Revenues increased 3.8% sequentially.
Intel guided first-quarter 2017 revenues of around $14.8 billion (+/-$500 million), almost flat sequentially. The non-GAAP gross margin is expected to be around 63% (+/-1%). R&D and MG&A expenses are anticipated to come in at around $5.3 billion.
Operating income is projected to be approximately $4.1 billion, while earnings are anticipated to be 65 cents (+/- 5 cents) per share.
The lacklustre guidance along with declining growth in core PC and data center markets has hurt share price movement on a year-to-date basis. Intel shares have inched up 0.2% as compared with the Zacks Semiconductor General industry’s gain of 2.1%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We note that Intel’s growing focus into areas with better growth prospects, such as the artificial intelligence (AI), autonomous car and Internet of Things (IoT) businesses are key catalysts.
In this regard, the acquisition of Mobileye is a significant development that will boost its presence in the autonomous vehicle market. Further, the recently completed divestiture of the security business will help the company to focus on these fast growing businesses.
However, increasing competition in the data center market is a headwind. Reportedly, Microsoft is collaborating with ARM chip-makers Qualcomm (QCOM - Free Report) and Cavium to design ARM-based servers, which will run a major part of its cloud services going ahead. (Read More: Microsoft Says Yes to ARM-Based Chips for its Cloud Servers)
Moreover, per IDC data worldwide server shipments decreased 3.5% year over year to 2.55 million units in fourth-quarter of 2016. The research firm cited “slowdown in hyperscale datacenter growth and continued drag from declining high-end server sales” as the primary reason behind this decline.
The data center business now comprises a major part of Intel’s overall business (29% of 2016 revenues). Hence, a decline in the server shipment amid intensifying competition is a major concern for the company.
Moreover, sluggish PC market growth will also continue to hurt Client Computing Group (55.8% of revenues) growth. Despite strong PC shipments in the first quarter – as per data available from both Gartner and IDC – we believe they are not sufficient enough to drive significant growth for the segment in the near term. (Read More: Strong PC Shipments Witnessed in Q1: Gartner, IDC)
Earnings Whispers
Our proven model does not conclusively show that Intel will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) 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 are pegged at 65 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Intel carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
Seagate Technology (STX - Free Report) , with an Earnings ESP of +3.77% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Intel (INTC) to Report Q1 Earnings: What's in the Cards?
Intel Corp (INTC - Free Report) is set to report first-quarter 2017 results on Apr 27, after the closing bell. Notably, the company has positive record of earnings surprises in the trailing four quarters, with an average surprise of 9.11%.
Last quarter, the company posted a positive earnings surprise of 5.33%. Non-GAAP earnings of 79 cents per share increased almost 4% from the year-ago quarter but declined 1.3% sequentially.
Strong year-over-year earnings growth was driven by 9.8% increase in revenues, which totaled $16.37 billion and comfortably surpassed the Zacks Consensus Estimate of nearly $15.80 billion. Revenues increased 3.8% sequentially.
Skyworks Solutions, Inc. Price and EPS Surprise
Skyworks Solutions, Inc. Price and EPS Surprise | Skyworks Solutions, Inc. Quote
Intel guided first-quarter 2017 revenues of around $14.8 billion (+/-$500 million), almost flat sequentially. The non-GAAP gross margin is expected to be around 63% (+/-1%). R&D and MG&A expenses are anticipated to come in at around $5.3 billion.
Operating income is projected to be approximately $4.1 billion, while earnings are anticipated to be 65 cents (+/- 5 cents) per share.
The lacklustre guidance along with declining growth in core PC and data center markets has hurt share price movement on a year-to-date basis. Intel shares have inched up 0.2% as compared with the Zacks Semiconductor General industry’s gain of 2.1%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We note that Intel’s growing focus into areas with better growth prospects, such as the artificial intelligence (AI), autonomous car and Internet of Things (IoT) businesses are key catalysts.
In this regard, the acquisition of Mobileye is a significant development that will boost its presence in the autonomous vehicle market. Further, the recently completed divestiture of the security business will help the company to focus on these fast growing businesses.
However, increasing competition in the data center market is a headwind. Reportedly, Microsoft is collaborating with ARM chip-makers Qualcomm (QCOM - Free Report) and Cavium to design ARM-based servers, which will run a major part of its cloud services going ahead. (Read More: Microsoft Says Yes to ARM-Based Chips for its Cloud Servers)
Moreover, per IDC data worldwide server shipments decreased 3.5% year over year to 2.55 million units in fourth-quarter of 2016. The research firm cited “slowdown in hyperscale datacenter growth and continued drag from declining high-end server sales” as the primary reason behind this decline.
The data center business now comprises a major part of Intel’s overall business (29% of 2016 revenues). Hence, a decline in the server shipment amid intensifying competition is a major concern for the company.
Moreover, sluggish PC market growth will also continue to hurt Client Computing Group (55.8% of revenues) growth. Despite strong PC shipments in the first quarter – as per data available from both Gartner and IDC – we believe they are not sufficient enough to drive significant growth for the segment in the near term. (Read More: Strong PC Shipments Witnessed in Q1: Gartner, IDC)
Earnings Whispers
Our proven model does not conclusively show that Intel will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) 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 are pegged at 65 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Intel carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
Teradyne (TER - Free Report) , with an Earnings ESP of +2.63% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Seagate Technology (STX - Free Report) , with an Earnings ESP of +3.77% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>