Can Solid Processor Revenues Boost Intel (INTC) Q1 Earnings?
Intel Corporation INTC is scheduled to report first-quarter 2024 results on Apr 25 after the closing bell. In the to-be-reported quarter, the company is likely to have recorded higher revenues year over year from the Client Computing Group (CCG), backed by a strong emphasis on product innovation. Efforts to increase efficiency in semiconductor manufacturing and improve the supply chain are positive factors.
Factors at Play
CCG is the company’s largest segment and accounts for the lion’s share of total revenues. It includes computer CPUs, several server boards, form factor systems and graphic products.
During the first quarter, the company launched Intel Core 14th Gen i9-14900KS processors, which is reportedly the world’s fastest desktop processor, delivering up to 6.2 gigahertz (GHz) max turbo frequency. The superfast processor will enable gamers to experience up to 15% better performance and benefit content creators with up to 73% performance improvement in compute-intensive workflows, such as 3D production multitasking versus competition. These are likely to have generated incremental revenues in the first quarter.
In the quarter, Intel launched market-leading silicon-enforced virtualization capabilities for the automotive industry, which offers one of the most efficient approaches in architecting a software-defined vehicle (SDV) – one that delivers 99% efficiency and zero latency. With high quality and personalized experiences, this performant compute platform with space for multiple software workloads is likely to unlock the next-gen vehicular experience for SDV. This is likely to get reflected in the upcoming results.
During the quarter, Intel introduced Continuous Profiler to open source -- a solution that combines multiple profilers into one view as a flame graph – in order to boost the open ecosystem approach to catalyze innovation and increase productivity for developers. It helps to identify production bottlenecks, improves throughput, reduces latency and optimizes performance.
The company also launched the new vPro platform with Intel Core Ultra processor that delivers enhanced power efficiency. With dedicated AI acceleration capability spread across the central processing unit, graphics processing unit and the new neural processing unit, it will unlock an endless new wave of AI experiences across all apps. All these are likely to have translated into additional revenues for the segment in the first quarter.
Key Developments in Q1
In the to-be-reported quarter, Intel secured up to $8.5 billion in direct funding under the CHIPS and Science Act. Under the agreement, Intel has the option to access federal loans of up to $11 billion, further amplifying its capacity for innovation and expansion. Additionally, by availing the U.S. Treasury Department's Investment Tax Credit, Intel anticipates substantial returns on qualified investments exceeding $100 billion over five years, a move poised to fuel long-term growth and competitiveness.
Overall Expectations
The Zacks Consensus Estimate for revenues from the CCG segment is pegged at $7,283 million, indicating an increase from $5,767 million in the year-ago quarter. Our estimate for revenues from this segment is pegged at $7,030 million, suggesting 21.9% growth year over year.
For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $12,909 million, which indicates an increase from the year-ago quarter’s reported figure of $11,715 million. The consensus estimate for adjusted earnings per share stands at 13 cents, suggesting solid improvement from a loss of 4 cents incurred in the prior year.
Earnings Whispers
Our proven model does not predict an earnings beat for Intel for the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 13 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Qualcomm Incorporated QCOM is set to release quarterly numbers on May 1. It has an Earnings ESP of +0.11% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Silicon Motion Technology Corporation SIMO is +5.96% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on May 2.
The Earnings ESP for Corning Incorporated GLW is +0.40% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Apr 30.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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