Income · Stocks to Consider and Updates

Intel Reports Stronger-than-Expected Results; Ups Forecast

Intel Corporation’s (NASDAQ: INTC – $53.05) quarterly profit rose in the first quarter by 50% from a year earlier to $4.45 billion. Revenue came to $16.1 billion, up 13% from a year ago on strength in its data-centric businesses, which accounted for 49% of total revenue. The unit, which increased revenue 24% to $5.2 billion, achieved growth in all market segments and saw increasing adoption of Intel Xeon® Scalable processors, used for artificial intelligence workloads. The Non-Volatile Memory Solutions Group grew revenue 20% as strong demand for storage continued. The Programmable Solutions Group (PSG) revenue surge 17% to $498 million. PSG won new designs with server OEMs adding Intel’s field programmable gate array acceleration to their data center offerings. Strong demand from retail and video customers drove first-quarter growth in the Internet of Things Group, with a 17% revenue gain. The Client Computing Group continued its strong execution and introduced a new lineup of high-performance mobile products including the 8th Gen Intel Core™ i9 processor. In autonomous driving, Mobileye continued momentum with automotive customers and recently won a high-volume design for EyeQ*5.

       For the current second quarter, Intel sees revenue of $15.8 billion to $16.8 billion, and earnings per share of $0.80 to $0.90. That compares favorably with consensus estimates for revenue of $15.59 billion and earnings of $0.81. The shares are higher by about 7% in after-hours trading to a new multi-year high. Earnings momentum continues to be strong, which has helped to propel the stock price higher. Still, total return potential over the pull to 2021-2023 is above average in my opinion and the well-covered $1.20 annual dividend, yielding 2.3%, sweetens the pot. Income investors seeking a relatively safe haven in the chip industry may want to take a look at these high-quality shares.

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