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Intel (INTC) to Report Q4 Earnings: What's in the Cards?

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Intel INTC is scheduled to report fourth-quarter 2019 results on Jan 23.

The company expects fourth-quarter 2019 revenues of around $19.2 billion, which indicates a rise of nearly 3% from the year-ago quarter’s figure. The Zacks Consensus Estimate for revenues is in line with the company’s projection.

For the fourth quarter, Intel expects non-GAAP earnings to be $1.24 per share. The Zacks Consensus Estimate for earnings, which is also pegged at $1.24, has been stable in the past 30 days. The estimate suggests a decline of 3.1% from the prior-year quarter’s reported figure.

Notably, the company has four-quarter positive earnings surprise of 10.2%, on average.

In the last reported quarter, the company delivered non-GAAP earnings of $1.42 per share, which beat the Zacks Consensus Estimate by 14.5%. The figure inched up 1.4% from the year-ago quarter’s tally.

Revenues of $19.19 billion surpassed the Zacks Consensus Estimate by 6.4%. However, the top line remained flat on a year-over-year basis.

Intel Corporation Price, Consensus and EPS Surprise



Factors Likely to Influence Q4

Intel’s fourth-quarter performance is expected to have benefited from its data center business. The segment has been gaining robust adoption of Xeon processors, which are integrated with Optane DC Persistent Memory solution.

Markedly, Intel’s Optane DC Persistent Memory modules are being leveraged by the likes of Oracle, SAP, Google, Microsoft, Baidu and Alibaba.

Moreover, rising demand for other high-performance products and growing adoption of cloud-based solutions are likely to continue favoring the data center business.

Further, the chipmaker’s focus on enhancing field programmable gate array (FPGA) for acceleration and memory to reduce latency as well as increase speeds is likely to get reflected in its fourth-quarter revenues. Additionally, the company’s non-volatile memory business is expected to have gained from 3D XPoint technology.

Talking about IoT businesses, Mobileye’s new design wins and increasing proliferation of IoT across transportation and retail applications are anticipated to have contributed to Intel’s fourth-quarter top line.

However, lower revenues in the client computing business stemming from sluggish platform volumes and PC units are likely to have been a headwind. In fact, management anticipates PC centric part of the business to be flat to marginally down for the fourth quarter.

Apart from this, growing competition across the server, storage and networking markets as well as adverse impacts from currency rates are likely to have exerted pressure on Intel’s performance in the to-be-reported quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Intel this time around. 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.

Intel has a Zacks Rank #3 and an Earnings ESP of 0.00.

Stocks to Consider

Here are some stocks you may consider as our proven model shows that these have the right mix of elements to beat estimates this time:

Microchip Technology Incorporated MCHP has an Earnings ESP of +1.91% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics Incorporated SYNA has an Earnings ESP of +0.69% and a Zacks Rank of 1.

Waters Corporation (WAT - Free Report) has an Earnings ESP of +0.83% and a Zacks Rank of 2.

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