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3 Key Estimates for Intel's Q1 Earnings Report

Ryan McQueeney
Updated
Is (WM) Outperforming Other Business Services Stocks This Year?

With industry rivals AMD AMD and Qualcomm QCOM posting their latest financial results on Wednesday afternoon, investor attention will now shift to semiconductor titan Intel INTC and its first quarter fiscal 2018 report after the closing bell today.

 

Concern that the strong run of the chip market could be nearing its cyclical end has lingered above the industry’s top players ahead of earnings season, but results and guidance have been decent so far. 

 

AMD topped expectations on the top and bottom line while calling for Q2 revenues to fall well ahead of previous estimates. Meanwhile, Qualcomm posted its own double beat and guided for net sales to improve by up to 4% in the current quarter.

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So what should investors expect from Intel when it reports this afternoon? Well, the latest Zacks Consensus Estimates are calling for Intel to report adjusted earnings of $0.71 per share and total revenue of $15.05 billion. These results would represent year-over-year growth rates of 7.6% and 1.7%, respectively.

 

Of course, this is only part of the picture, and we can turn to our exclusive Zacks Consensus Non-Financial Metrics Estimates to better prepare for the report.

 

The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.

 

Intel operates through a number of key business segments, and investors will likely want to know exactly how the company is doing in each of these. The largest of Intel’s individual units is its Client Computing Group, which brings under one roof its platform products for notebooks, 2-in-1s, ultrabooks, desktops, tablets and phones.

 

Based on our latest consensus NFM estimates, we expect Intel to report total Client Computing Group revenues of $7.83 billion. This result would represent year-over-year growth of 5.9%. Intel actually reported a slight decrease in revenue for this unit last quarter, so growth of nearly 6% would certainly be welcomed by investors.

 

Intel’s next largest segment is its Data Center Group. This unit deals with servers, workstations, and other products for data center and cloud computing environments. Our consensus estimates are calling for Intel to post Data Center revenues of $4.82 billion, which would mark growth of more than 13.9% from the year-ago period.

 

Finally, the company’s third biggest unit in terms of revenue generation has historically been its Non-Volatile Memory Solutions Group. According to our consensus estimates, analysts expect Intel to report segment revenues of $925 million in this unit, up modestly from about $866 million last year. Investors should note that Intel’s Internet of Things Group has also been a rapid grower and might surpass the NVMS Group soon.

 

It is important to properly prepare for, and subsequently digest, massive earnings reports like that of Intel. As one of the world’s largest semiconductor manufacturers, Intel has its hands in nearly every corner of the chip market, and its segment results might help us understand what is hot and what is not in the industry.

 

Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

 

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