During the prior 12-month period, the semiconductor industry has suffered a decline of 12%, primarily attributable to the trade war between China and the US. However, Intel Corporation (INTC) has mostly remained clear of the bearish sentiments, growing 7.5% during the same period, thanks to a wide range of product offerings.
Going into the fourth-quarter results, scheduled to be published on January 24, the world’s largest chipmaker is well positioned to take advantage of the rapid growth in digitization.
Analysts expect Intel to post earnings of $1.22 per share on revenue of $19.01 billion. The street estimates for the fourth quarter are almost in line with the expectations of the management, and hence the company will possibly be looking at a top-and-bottom-line beat.
However, for the upcoming fiscal year, analysts have modest targets on the stock. While revenue is expected to grow 3%, EPS is estimated to edge up about 1% in 2019. If Intel’s outlook for the year proves to be more optimistic, it could bump up the stock.
Intel Q3 earnings conference call full transcript
Intel has had a very productive fourth quarter. During this period, the company launched its 9th Gen Intel Core processors for use in ultra-portable laptops, besides the “Lakefield” brand of hybrid CPU architecture. The company also initiated the shipping of Cascade Lake Xeon Scalable processors.
These breakthroughs in the product side should boost Intel’s Cloud Computing and Data Center units, both of which together make up over three-quarters of its total revenue.
Then there is Mobileye, which has been performing quite well. The Israeli company, which was acquired by Intel in 2017, delivered a 50% jump in revenues to $191 million during the last reported quarter. Mobileye specializes in autonomous driving solutions.
Last but not least, the chipmaker had announced a $15 billion stock repurchase program back in November, suggesting the board believes its shares are undervalued in the market.
Meanwhile, the board has so far failed to find a replacement to CEO Brian Krzanich, who was ousted seven months back. It is rumored that the search is now over, and the company might make the announcement along with the quarterly results. The rumored candidates range from Apple’s (AAPL) SVP of Hardware Technologies Johny Srouji to Qualcomm (QCOM) President Cristiano Amon.
An announcement in this regard could also become a stock-moving factor on Thursday.