| | | Intel stock sinks as boom in earnings is not expected to last
Published: April 23, 2020 at 4:15 p.m. ET
By Wallace Witkowski
Earnings and revenue jumped in the first quarter as need for PCs and server chips spiked due to workers headed home, but forecast for profit in second quarter comes in below expectations
Intel Corp. revealed Thursday afternoon that earnings and revenue spiked well above expectations in the first quarter, but predicted that profit would come in lower than projections in the second quarter, sending shares down in after-hours trading.
Intel INTC, -1.76% reported first-quarter net income of $5.7 billion, or $1.31 a share, compared with $3.97 billion, or 87 cents a share, in the year-ago period. Adjusted earnings were $1.45 a share, compared with 89 cents a share in the year-ago period.
Revenue jumped roughly 23% to $19.8 billion from $16.06 billion in the year-ago quarter; Intel quarterly revenue topped $20 billion for the first time in the fourth quarter.
Analysts surveyed by FactSet had projected earnings of $1.28 a share on revenue of $18.67 billion on average.
Intel has suspended stock repurchases and issued $8 billion in debt since COVID-19 began to sweep across the globe, but had not rescinded financial guidance like many other large companies. Analysts have suggested that the company stands to benefit in the short term from the pandemic, as the need for laptops and cloud-computing power to support workers moving home from the office is thought to have spurred sales of its core PC and server chips.
In Thursday’s report, Intel provided second-quarter guidance for adjusted earnings of $1.10 a share on sales of about $18.5 billion. Analysts on average were expecting lower sales but higher profit, according to FactSet, which reports expectations of adjusted earnings of $1.20 a share on sales of $17.79 billion.
Data-center group, or DCG, revenue jumped 43% to $7 billion, while analysts expected it to rise 29% to $6.32 billion. Intel’s largest segment — client-computing, the traditional PC group — rose 14% to $9.8 billion, with analysts expecting a 8.8% rise to $9.34 billion from a year ago.
continues at marketwatch.com |
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