Intel Shares Jump After Company Reports Better Than Expected Earnings and Revenue

Chipmaker Intel saw its shares soar on Thursday after the company beat on the top and bottom lines in its latest quarterly report.

The company also reported strong guidance which helped shares jump as much as 7% in after-hours trading.

For the fourth quarter Intel reported earnings of $1.52 a share, excluding certain items. This is compared to $1.25 a share that was expected by analysts per Refinitiv.

Revenue was reported as $20.21 billion compared to the $19.23 billion as expected by analysts, according to Refinitiv. Revenue rose 8% from a year earlier in the quarter, which ended on Dec. 28.

The company’s largest operating segment, the Client Computing Group posted $10.01 billion in revenue, up about 2% year over year. This was also ahead of the $9.74 billion consensus estimate among analysts polled by FactSet.

Revenue from the company’s Data Center Group was up about 19% at $7.21 billion. Also ahead of the $6.40 billion FactSet analyst consensus.

Intel’s Non-Volatile Memory Solutions Group saw $1.22 billion in revenue, coming in below the $1.28 billion FactSet consensus.

The Internet of Things Group produced $1.16 billion in revenue while the FactSet consensus was $1.03 billion.

On a conference call with analysts, Inel CEO Bob Swan said that PC chip supply was light. “We are also planning for an increasingly competitive environment as we move through the year,” said George Davis, Intel’s finance chief. “As a result of these dynamics, we expect total revenue to be more front-end loaded in the first half then we seen historically.”

Intel is “expecting an exceptionally strong Q1 as cloud customers continue to build capacity and adopt our highest performing products,” Davis said. “This will mark three quarters of strong cloud buildout, and we expect more modest capacity expansion for the remainder of the year as CSP’s move to a digestion phase.”

Nomura Instinet analysts led by David Wong wrote in January, “We think that Intel’s PC chip shortages likely resulted in some PC business being pushed from the December quarter into the March-2020 quarter, which we think could cause Intel’s CCG revenue in the March quarter to be higher than usual, despite a sequential seasonal step down.”

Meanwhile Jefferies analysts led by Mark Lipacis wrote this week, “It looks like INTC’s 10nm server MPU [microprocessor unit] is at least one full year behind AMD, and we expect INTC to lose 2,000bps of server share to AMD over the next two years.”

Looking ahead, Intel has guided first quarter earnings to be $1.30 a share, excluding certain items. Revenue is expected to be $19 billion.

Analysts polled by Refinitiv had expected $1.04 in earnings per share, excluding certain items, and $17.19 billion in revenue.

Disclaimer: We have no position in Intel Corporation (NASDAQ: INTC) and have not been compensated for this article.