Press "Enter" to skip to content

Intel stock jumps as it surpasses Q2 estimates; Apple to buy its smartphone modem business for $1 billion

Intel’s (NASDAQ: INTC) stock rose about 5% after the market closed today as the company’s Q2 results surpassed estimates and on the announcement of Apple’s (NASDAQ: AAPL) acquisition of Intel’s smartphone modem business. The chipmaker also lifted adjusted EPS and revenue guidance for the full-year 2019.

Intel reported earnings of $1.06 per share on revenue of $16.51 billion. Analysts had expected the chipmaker to earn $0.90 per share on revenue of $15.69 billion in the second quarter. As expected, Apple acquires Intel’s smartphone modem business for $1 billion.

Intel (INTC) stock rises on Q2 beat; lifts FY19 revenue and adjusted EPS outlook; Apple buys Intel's smartphone modem business for $1 billion

GAAP EPS of $0.92 declined 12% year-over-year. Second quarter results exceeded the company’s guidance given in April. Intel had guided GAAP earnings of $0.83 per share for the second quarter on revenues of $15.6 billion. The company had projected adjusted earnings to be $0.89 per share in the June quarter.

Based on the strong Q2 performance, the Santa Clara, California-based firm lifted its FY19 revenue outlook by $500 million to $69.5 billion and adjusted EPS guidance by 5 cents to $4.40. GAAP EPS is now expected to be $4.10 versus the prior estimate of $4.14.

For the third quarter of 2019, Intel expects GAAP EPS to be $1.16 and non-GAAP EPS to be $1.24. Revenue for the September quarter is pegged at about $18 billion.

“Second quarter results exceeded our expectations on both revenue and earnings, as the growth of data and compute-intensive applications are driving customer demand for higher performance products in both our PCcentric and data-centric businesses”, said CEO Bob Swan.

During the 2019 Investor Meeting in May, CEO Bob Swan said “We let you down” as the company cut down the fiscal 2019 outlook during its first quarter earnings reporting.

Read: Will Beyond Meat keep up the pace of momentum ahead of Q2 earnings?

A separate announcement stated that Apple will buy majority of Intel’s smartphone modem business for $1 billion. Approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases. As a result of this transaction, which is expected to close in the fourth quarter of 2019, Apple will now hold over 17,000 wireless technology patents.

“This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” said Intel CEO Bob Swan.

The PC-centric business (CCG) was up 1% in the second quarter due to a strong mix of Intel’s higher performance products, strength in the commercial segment, and customers buying ahead of possible tariff impacts.

Intel Q2 2019 earnings - Global  PC shipments

Market research firms IDC and Gartner reported recently that global PC shipments grew in the second quarter of 2019 compared to the same period a year ago. According to IDC, global PC shipments have grown 4.7% year-over-year to 64.9 million in Q2 and as per Gartner’s July report, global PC shipments have increased by 1.5% to 63 million units.

Intel’s peer Advanced Micro Devices (NASDAQ: AMD) is scheduled to report its recently ended quarter financial results on July 30, Tuesday. The Philadelphia Semiconductor Index was down 1.7% when the market closed today. Cypress Semiconductor (NASDAQ: CY), which reported its Q2 results after the bell, also topped the estimates.

Intel stock had lost 13% from its 52-week high ($59.59) price it reached on April 17, 2019, and it had advanced 11% since the beginning of 2019.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

 

Related Articles

Top
%d bloggers like this: