Yahoo Finance Intel (INTC) Earnings After Bell: Will Management Guide Shares Up?
Earnings season is in the peak of excitement and semis are on the deck. Intel INTC is reporting after the bell today, July 25th. They will be following Texas Instruments TXN who reported a significant top and bottom-line beat on Tuesday, surging the stock over 9%.
Analysts are expecting a slowdown this quarter as the semiconductor industry begins its 2019 cool off. Intel analysts are expecting an EPS of $0.89, which would represent an over 14% year-over-year (YoY) decline. Revenue estimates sit at $15.6 billion, which would illustrate a 9% YoY decline.
Intel is a relatively big mover on earnings, with an average 7% price impact from the last 6 quarterly reports. Management's forward guidance has historically driven INTC’s share price on earnings day.
Recent News
INTC took a substantial 10% dive after its 1st quarter earnings were released. The company beat on both fronts but management’s significantly reduction in forward guidance took a 10.7% gouge out of ITNC’s share price. The stock is still down over 10% from this release but recovered quite a bit since the beginning of June showing investors a sizable share price appreciation of over 20%.
Intel decided to abandon its 5G smartphone-modem business in April, which was losing the company roughly $1 billion annually. Now they are in talks with Apple AAPL to sell this business segment, which could be valued at more than $1 billion. Intel bought the business from Infineon for $1.4 billion 8 years ago.
Outlook
Intel is in the midst of a transformation from a PC-centric company to a data-centric one. Nearly half of their growing revenue is now being driven by data-centric revenue streams, which expanded 18% this past fiscal year. Intel’s total accessible market (TAM) grew to more than $300 billion through acquisitions and product innovations. The business is committed to continue investing and developing their cloud computing, 5G networking, AI & analytics, along with the rest of their portfolio.
The PC business remains Intel’s biggest topline driver, but this business is both mature and overly competitive. Intel is going to have to rely on their data-centric businesses for growth moving forward.
Take Away
Intel has far underperformed both the semiconductor industry and the S&P 500 so far in 2019. The company has begun to see declines in its top and bottom lines as the semiconductor industry cools off.
Intel has beaten every EPS estimate for over 5 years and sales estimates are rarely missed and when they are the effect is marginal. Investors need to watch out for management’s forward guidance and sentiment, which should be the driver of the price action in after-hours trading today.
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