Intelligent (INTC Earnings)
Semiconductor firm Intel releases Q2 results tonight after the close with a conference call slated to begin at 5:00 p.m. ET.
The Capital IQ Consensus Estimate sees Q2 EPS of $0.90 (vs $1.04 a year ago) on revenue declines of 7.4% to $15.70 bln.
Guidance for Q2 stands at EPS of $0.89 on revs of approx $15.6 bln.
Intel will likely give Q3 guidance in the press release; the current Cap IQ Estimate calls for EPS of $1.16 and revs of $17.76 bln.
For FY19 Intel sees EPS of $4.35 on revs of approx $69.0 bln vs the Capital IQ Consensus Estimate of $4.22 and $68.32 bln.
INTC was the subject of some recent periodical headlines that Apple (AAPL) was a potential suitor for INTC's smartphone modem business, essentially a re-hash of a story from the day after last quarter's print.
TECHS:
Intel currently trades at about 3.7x forward sales vs peers Texas Instruments (TXN) 8.2x, Micron's (MU) 2.8x, and Advanced Micro's (AMD) 4.9x multiples.
RESULTS:
🧨🧨🧨Intel beats by $0.16, beats on revs; guides Q3 EPS, revs above consensus; raises FY19 EPS, revs outlook 🧨🧨🧨
Reports Q2 (Jun) earnings of $1.06 per share, $0.16 better than the S&P Capital IQ Consensus of $0.90; revenues fell 2.7% year/year to $16.5 bln vs the $15.7 bln S&P Capital IQ Consensus.
Achieved 1% growth in the PC-centric business while data-centric revenue declined 7%.
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. New, 10nm-based 10th Gen Intel Core processors (code-named "Ice Lake") are now shipping, and expected to be in volume systems on retail shelves this 2019 holiday selling season.
Collectively, Intel's data-centric businesses declined 7% yr/yr in the second quarter. In the Data Center Group (DCG), the communications service provider segment grew 3% while the cloud segment declined 1% and enterprise and government revenue declined 31%. The Internet of Things Group (IOTG) achieved record revenue, up 12% yr/yr (23% excluding Wind River1 ) on broad strength and increased demand for higher performance processors. Mobileye achieved second-quarter revenue of $201 million, up 16% yr/yr on continued customer momentum. Intel's memory business (NSG) was down 13% yr/yr in a challenging pricing environment. Intel's Programmable Solutions Group (PSG) revenue was down 5% yr/yr in the second quarter.
Co issues upside guidance for Q3, sees EPS of approx. $1.24 vs. $1.16 S&P Capital IQ Consensus; sees Q3 revs of approx. $18.0 bln vs. $17.76 bln S&P Capital IQ Consensus.
Co raised FY19 guidance -- sees EPS of approx. $4.40 (from $4.35) vs. $4.22 S&P Capital IQ Consensus; sees FY19 revs of approx. $69.5 bln (from $69.0 bln) vs. $68.32 bln S&P Capital IQ Consensus.
Intel's Business Outlook does not include the potential impact of our agreement to sell the majority of our smartphone modem business, announced today. Upon close, we expect a gain on divestiture of approximately $500 million net of tax, which will be excluded on a non-GAAP basis.
Also announced deal to sell its smartphone modem business for $1 bln to Apple (AAPL). See 16:01 comment for more details.
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