Intel (INTC, $59.22) beats Q1 earnings expectations; but hints at investment weighing on profit outlook
Intel Corp. reported first quarter earnings that surpassed analysts’ expectations. However, the semiconductor & tech behemoth indicated that investments in new manufacturing foundries would likely affect near-term profit margins.
Intel’s earnings came in at $1.39 per share , beating the $1.15 per share expected by analysts. The company’s sales of $18.6 billion, also exceeded analysts’ estimated $17.79 billion.
For the current quarter, Intel expects earnings of $1.05 per share on revenues of around $17.8 billion.
For the full-year, the company projects revenues forecasts of $72.5 billion, gross margins of 56.5% and earnings of $4.60 per share, on the back of work-from-home environment’s boost to PC demand.
Last month, Intel announced that it would invest $20 billion to build two new factories in Arizona.
“Gross margin percent will be lower in the second half of the year predominantly due to increased 7-nanometer start-up costs and industrywide supply constraints impacting client volume and mix," CFO George Davis said. "We expect increased R&D throughout the year as we invest in our road map and IDM 2.0 strategy."
Davis also mentioned that we expect increased demand in data center segment in the second half as both cloud enterprise and government segments returned to growth.
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Notable companies
The most notable companies in this group are NVIDIA Corp (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM), Broadcom Inc. (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD), QUALCOMM (NASDAQ:QCOM), Texas Instruments (NASDAQ:TXN), Applied Materials (NASDAQ:AMAT), Intel Corp (NASDAQ:INTC), Lam Research Corp (NASDAQ:LRCX), Micron Technology (NASDAQ:MU).
Industry description
The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.
Market Cap
The average market capitalization across the Semiconductors Industry is 46.09B. The market cap for tickers in the group ranges from 13.43K to 2.76T. NVDA holds the highest valuation in this group at 2.76T. The lowest valued company is CYBL at 13.43K.
High and low price notable news
The average weekly price growth across all stocks in the Semiconductors Industry was -3%. For the same Industry, the average monthly price growth was -1%, and the average quarterly price growth was 1%. QNCCF experienced the highest price growth at 30%, while MXL experienced the biggest fall at -43%.
Volume
The average weekly volume growth across all stocks in the Semiconductors Industry was 12%. For the same stocks of the Industry, the average monthly volume growth was 19% and the average quarterly volume growth was -0%
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Valuation Rating: 58
P/E Growth Rating: 48
Price Growth Rating: 58
SMR Rating: 70
Profit Risk Rating: 62
Seasonality Score: 6 (-100 ... +100)