Intel Posts Strong Results; Guides Higher and Hikes Dividend

  Chip behemoth Intel Corp. (NASDAQ: INTC – $37.43) reported solid results for the March quarter as revenues came in at nearly $14.8 billion, a year-over-year improvement of about 8%. Adjusted share net clocked in at $0.66, representing an increase of more than 22% from the previous-year period. Earnings topped the Street estimates by a penny. Revenue in the three months ended in March rose 8% year over year, to $14.8 billion, which was in line with estimates.

       Revenue growth was experienced across nearly every segment during the quarter, with the Non-Volatile Memory Solutions Group leading the way with a year-to-year advance of 55%. The Programmable Solutions Group chipped in with an 18% gain, versus the last year’s comparable period. Moreover, the Internet of Things unit climbed 11%, to $721 million. Further, the Client Computing Group and Data Center Group inked top-line gains of 6% each compared to 2016’s March period. The only segment with a decline was the Intel Security Group, which fell a modest 1%, year over year. Higher average selling prices enabled the gross margin to reach 61.8%, equivalent to a 250 basis point advance over the previous-year tally.

       Company guidance was also pretty good for the June period and the whole of 2017. For the second quarter, revenues are likely to be $14.4 billion, with adjusted share earnings of $0.68 and for the full year, revenues are poised to hit the $60 billion mark, likely resulting in earnings per share of $2.85. The gross margin is likely to be 63%, plus or minus a couple of percentage points.

       Intel remains a good choice for conservative income investors seeking a technology holding to round out their diversified portfolios. The recent 5% increase to the dividend (to $1.09 a share on an annualized basis) also helps to sweeten the pot and provides a level of support for the share price. Too, the company’s recent announcement that it wants to make a splash in the driverless car market with the pending acquisition of Mobileye NV is another reason for optimism moving forward. This purchase would further diversify Intel beyond its core (and mature) personal computer businesses.

INTC

 

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