Income · Stocks to Consider and Updates

Intel Delivers Strong Results; Guidance Improves

Chip giant Intel Corp. (NASDAQ: INTC – $43.49) reported strong results for the third quarter as adjusted earnings per share came in at $1.01. This represented a sharp 26.3% advance over the previous-year tally and was markedly ahead of the $0.80 forecast by Wall Street. Revenues were also stronger than predicted, settling at $16.1 billion, a 2.4% increase a year ago.  The strong showing was broad-based, as most of Intel’s segments produced year-over-year top-line increases.

  • Data Center Group, the company’s second largest by sales, advanced 7% over the third quarter of last year, to $4.9 billion. This is noteworthy, as this segment appears to be followed closely by analysts, reflecting its high growth potential.
  • The Internet of Things also contributed with a year-over-year top-line gain of 23%. Readers should note that this advance was achieved off a relatively low base ($849 million). Still, this is another avenue that could offer considerable growth potential longer term for the company, as this represents a way for everyday products to be connected to one another via the Internet.
  • Programmable Solutions Group chipped in with a 10% improvement, thanks to design wins with automotive and cloud service provider customers that help advance Intel’s position in artificial intelligence.
  • The largest improvement, however, was the non-volatile memory solutions division, which posted a stellar 37% year-over-year increase with sales of $891 million.
  • Intel’s largest unit, the Client Computing Group, posted flat sales of $8.9 billion.     

       INTC, higher by 5.5% in today’s trading and at a multi-year high, also provided strong guidance for the fourth quarter and full-year. For 2017, the company said it expects to earn an adjusted $3.25 per share on revenue of $62 billion, beating analysts’ estimates of $3.01 on revenue of $61.4 billion. I continue to like Intel shares for conservative income-minded investors seeking a presence in the semiconductor space. Along with the company’s dividend yielding 2.6%, renewed growth prospects adds to its total-return potential 3 to 5 years out.

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