Chipmaker Intel Beats First-Quarter Targets But Stock Drops On Outlook

Chipmaker Intel (INTC) late Thursday handily beat Wall Street’s first-quarter targets but its second-quarter earnings guidance disappointed. Intel stock dropped in extended trading.


The Santa Clara, Calif.-based company earned an adjusted $1.39 a share on sales of $19.67 billion in the March quarter. Analysts had expected Intel earnings of $1.15 a share on sales of $17.86 billion. On a year-over-year basis, Intel earnings and sales both dipped 1%.

It was the company’s third straight quarter of declining sales on a year-over-year basis. Earnings have been flat or declining for the last three quarters as well.

In the first quarter, strong sales of chips for personal computers helped to offset a decline in chips for data centers. Revenue in Intel’s client computing group rose 8% to $10.6 billion while data center group sales fell 20% to $5.6 billion.

Second-Quarter Earnings Outlook Light

For the second quarter, Intel expects to earn an adjusted $1.05 a share on sales of $18.9 billion. Wall Street had predicted Intel earnings of $1.09 a share on sales of $17.55 billion in the June quarter. In the year-earlier period, Intel earnings were $1.23 a share on sales of $19.73 billion.

For the full year, Intel guided to adjusted earnings of $4.60 a share on sales of $77 billion. Analysts had been expecting earnings of $4.58 a share on sales of $72.19 billion. Last year, Intel earned an adjusted $5.30 a share on sales of $77.87 billion.

“This is a pivotal year for Intel,” Chief Executive Pat Gelsinger said in a news release. “We are setting our strategic foundation and investing to accelerate our trajectory and capitalize on the explosive growth in semiconductors that power our increasingly digital world.”

Intel Stock Falls In Late Trades

In after-hours trading on the stock market today, Intel stock fell 1.4%, near 61.65. During the regular session Thursday, Intel stock declined 1.8% to 62.57.

On March 16, Intel stock attempted to break out of a loose, year-long double-bottom base at a buy point of 65.21, according to IBD MarketSmith daily charts. But on March 25, it triggered a stop-loss sell rule when it fell 7% to 8% below its buy point, based on IBD trading principles.

In other news, a federal jury in Waco, Texas, cleared Intel of claims that it infringed on semiconductor patents owned by patent holding company VLSI Technology. It was the second of three cases VLSI has brought against Intel. In the first case, a different jury at the same courthouse last month told Intel to pay VLSI $2.18 billion over other patents, Bloomberg reported. A trial in the third case is set for June.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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