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Will Intel's (INTC) CCG and DCG Segments Drive Q4 Earnings?
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Intel Corp. (INTC - Free Report) is riding high on robust performance from the Client Computing Group (“CCG”) and data-centric portion of business. Data Center Group (“DCG”), Internet-of-Things Group, Non-Volatile Memory Solutions and Programmable Solutions Group form the crux of the company’s data-centric business model. The company is set to report fourth-quarter 2017 results on Jan 25.
Click here to know how the company’s overall Q4 performance is expected to be.
CCG — Trend Positive
Client Computing Group (54.9% of revenues) — Revenues remained almost flat on a year-over-year basis but increased 7.9% sequentially to $8.86 billion.
The company launched the new 8th Generation Core processor (Coffee Lake), which includes Intel’s first six-core desktop central processing unit (CPU). Management claims Coffee Lake to be its best gaming processor to date, with up to 50% better performance than competitive offerings in the market.
During the quarter, Intel shipped its first modem in the auto industry. Modem revenues surged 37% on a year-over-year basis.
However, intense competition from Advanced Micro Devices Inc (AMD) based on an expanding product portfolio is a concern.
The Zacks Consensus Estimate for the CCG segment is currently pegged at $8.745 billion.
DCG — Purley Upgrade to Drive Growth
Data Center Group (30.2% of revenues) — Revenues increased 7.4% year over year and 11.6% sequentially to $4.88 billion.
The company shipped Xeon Scalable (formerly known as Skylake) to more than 200 original equipment manufacturer (OEM) systems in the quarter.
The company recently announced Intel Stratix, the industry’s first field programmable gate array (FPGA) integrated with high bandwidth memory to accelerate workloads and keep pace with data explosion.
The newly added product will expand the onboard memory pool and add more bandwidth. We believe that the launch will improve scalability, reliability, power and density requirements of future HPC deployments.
Intel also announced substantial advances in its wireless product portfolio to accelerate 5G adoptions, alongside introducing Intel XMM 8000 series and Intel XMM 7660 series modems. The launch of Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are also key catalysts.
For the data-center group, management still expects revenues to grow in the high-single digits and operating margin greater than the lower end of its long-term guidance range of 40-45% in 2017. The Zacks Consensus Estimate for the DCG segment is currently pegged at $5.072 billion.
NVIDIA, Western Digital and Analog Devices have a long-term earnings growth rate of 10.3%, 25.1% and 10.4%, respectively.
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.
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Will Intel's (INTC) CCG and DCG Segments Drive Q4 Earnings?
Intel Corp. (INTC - Free Report) is riding high on robust performance from the Client Computing Group (“CCG”) and data-centric portion of business. Data Center Group (“DCG”), Internet-of-Things Group, Non-Volatile Memory Solutions and Programmable Solutions Group form the crux of the company’s data-centric business model. The company is set to report fourth-quarter 2017 results on Jan 25.
Intel Corporation Price and EPS Surprise
Intel Corporation Price and EPS Surprise | Intel Corporation Quote
Click here to know how the company’s overall Q4 performance is expected to be.
CCG — Trend Positive
Client Computing Group (54.9% of revenues) — Revenues remained almost flat on a year-over-year basis but increased 7.9% sequentially to $8.86 billion.
The company launched the new 8th Generation Core processor (Coffee Lake), which includes Intel’s first six-core desktop central processing unit (CPU). Management claims Coffee Lake to be its best gaming processor to date, with up to 50% better performance than competitive offerings in the market.
During the quarter, Intel shipped its first modem in the auto industry. Modem revenues surged 37% on a year-over-year basis.
However, intense competition from Advanced Micro Devices Inc (AMD) based on an expanding product portfolio is a concern.
The Zacks Consensus Estimate for the CCG segment is currently pegged at $8.745 billion.
DCG — Purley Upgrade to Drive Growth
Data Center Group (30.2% of revenues) — Revenues increased 7.4% year over year and 11.6% sequentially to $4.88 billion.
The company shipped Xeon Scalable (formerly known as Skylake) to more than 200 original equipment manufacturer (OEM) systems in the quarter.
The company recently announced Intel Stratix, the industry’s first field programmable gate array (FPGA) integrated with high bandwidth memory to accelerate workloads and keep pace with data explosion.
The newly added product will expand the onboard memory pool and add more bandwidth. We believe that the launch will improve scalability, reliability, power and density requirements of future HPC deployments.
Intel also announced substantial advances in its wireless product portfolio to accelerate 5G adoptions, alongside introducing Intel XMM 8000 series and Intel XMM 7660 series modems. The launch of Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are also key catalysts.
For the data-center group, management still expects revenues to grow in the high-single digits and operating margin greater than the lower end of its long-term guidance range of 40-45% in 2017. The Zacks Consensus Estimate for the DCG segment is currently pegged at $5.072 billion.
Zacks Rank and Stocks to Consider
Intel carries a Zacks Rank #3 (Hold).
NVIDIA Corporation (NVDA - Free Report) , Western Digital Corporation (WDC - Free Report) and Analog Devices, Inc. (ADI - Free Report) are some better-ranked stocks in the same sector. All the three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA, Western Digital and Analog Devices have a long-term earnings growth rate of 10.3%, 25.1% and 10.4%, respectively.
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 >>