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Intel's result: New CEO does not get a honeymoon time

Intel Corp .: s new CEO should arrive at his first performance report with a lot of investor updates after what is expected to be a slow start to 2019. Soon after his latest performance report, Intel INTC, + 0.56% made interim manager Bob Swan the company's executive director on a permanent basis and brought on Qualcomm Inc.'s George Davis earlier this month to fulfill Swan's role as finance manager. With results scheduled for Thursday after the end of the market, investors will look for further details on Intel's latest decision to drop out of the 5G smartphone modem market after an Apple Inc. solution. AAPL, + 0.33% and Qualcomm QCOM, + 2.60% . Don't miss: Technical giants made so much money in 201 8 that 2019 must look pretty bad Instinet Analyst David Wong, who has a purchase at Intel, said he sees Intel's withdrawal decision as proof of that the company management maintains the strategy of focusing on high growth, profitability products. "We estimate that sales of the smartphone modem accounted for just over SEK 2 billion in revenue in 2018," Wong said. "Intel cited a lack of a clear path to profitability as a reason to leave the modem. This means that manufacturing, R&D and other modem-related costs were comparable to or higher than modem sales revenue last year." The Swan must also take deal with continued reports of CPU shortage – which may be useful to rival Advanced Micro Devices Inc. AMD, + 1.81% – along…

Intel Corp .: s new CEO should arrive at his first performance report with a lot of investor updates after what is expected to be a slow start to 2019.

Soon after his latest performance report, Intel

INTC, + 0.56%

made interim manager Bob Swan the company’s executive director on a permanent basis and brought on Qualcomm Inc.’s George Davis earlier this month to fulfill Swan’s role as finance manager. With results scheduled for Thursday after the end of the market, investors will look for further details on Intel’s latest decision to drop out of the 5G smartphone modem market after an Apple Inc. solution.

AAPL, + 0.33%

and Qualcomm

QCOM, + 2.60%

.

Don’t miss: Technical giants made so much money in 201

8 that 2019 must look pretty bad

Instinet Analyst David Wong, who has a purchase at Intel, said he sees Intel’s withdrawal decision as proof of that the company management maintains the strategy of focusing on high growth, profitability products.

“We estimate that sales of the smartphone modem accounted for just over SEK 2 billion in revenue in 2018,” Wong said. “Intel cited a lack of a clear path to profitability as a reason to leave the modem. This means that manufacturing, R&D and other modem-related costs were comparable to or higher than modem sales revenue last year.”

The Swan must also take deal with continued reports of CPU shortage – which may be useful to rival Advanced Micro Devices Inc.

AMD, + 1.81%

– along with a slowdown in cloud costs and continued production problems.

What to look at

Revenue: Intel is expected to enter an adjusted result of 87 cents a share, according to a FactSet average of the analyst’s predictions, in line with Intel’s forecast. It is down from the $ 1.01 stock expected at the beginning of the fourth quarter. Appreciate, a software platform that uses crowdsourcing from hedge fund managers, brokerage firms, queue analyzers, and others, requires a profit of 91 cents per share.

Revenue: Wall Street expects an average of $ 16.03 billion from Intel, according to 29 analysts polled by FactSet compared to $ 16.07 billion for the period since. The current estimate is down from $ 18.39 billion expected at the beginning of the quarter. Intel predicted revenue of about $ 16 billion. Calculate expected revenue of $ 16.21 billion.

Data Center Group or DGC, revenue is expected to decrease 2.5% to $ 5.1 billion, according to FactSet data, while Intel’s largest segment, client computer or traditional computer is expected to rise 1.9% to $ 8.38 billion from the beginning of the year . Revenue for non-volatile memory solutions is expected to decline by 9.4% to $ 942.1 billion over the previous period. “Internet of Things” or IoT, revenue is expected to decline by 6% to $ 789.5 million.

Stock movement: Intel shares increased by 18% since chip maker’s latest earnings report compared to a 3.4% increase in Dow Jones Industrial Average

DJIA, -0.18%

a 10% increase on the S & P 500 index

SPX, + 0.10%

a 13% advance on the technical heavy Nasdaq Composite Index

COMP, + 0.22%

and a 24% increase on the PHLX Semiconductor Index

SOX, + 0.01%

.

What analysts say

Analyst Mark Lipacis, who has an underperformance and a price of $ 40 on Intel, says the shortcomings of central processors or processors are expected to be in the third quarter of this year, and it is market share to AMD. Lipacis estimates AMD’s share of the CPU market at only shy of 10% compared to 3% to 5% share in the first half of 2018.

“Intel’s misexecution of 10nm seems to have created a need in the supply chain to diversify CPU supply by giving AMD higher market share, says Lipacis.

Intel has also struggled to roll out its new generation of chips manufactured with a 10 nanometer manufacturing process as AMD rolls out its own 7nm process. small a chipmaker can make the transistors that run on a computer circuit, with the general rule that smaller transistors are faster and more efficient when using power.

Cowen analyst Matthew Ramsay, who has a market classification on Intel and a price target of $ 50, the capital injection on clouds is calculated during the second half of the year after a soft start to 2019. Ramsay expects a “lively debate” on expenditure, data center growth and progress on the 10nm front and competition from AMD.

“Although Intel can be stretched to hit overall 2019 revenue consensus given PC chip flaws and less than some 10nm Ice Lake timing in client, we think [the data-center group] should post significantly better results over 2H19 and up to the total gross margins of Intel despite AMD stock gains for Rome during 2H19, Ramsay says.

More: Boeing, Facebook and Tesla are playing “Keep my beer” in the midst of profit river

Macrarie research analyst Srini Pajjuri, who has a top rating and a price target of $ 62, said that server share was “overblown”.

“We model [data-center group] revenue to reduce 3% YoY in 1H19 due to ongoing stock thinning and capex slowdown in hyperscale customers “That said, underlying demand remains strong and Intel should benefit from increased competition among cloud providers and new streaming services.”

Of the 38 analysts who Honor Intel has 16 purchases or overweight grades, 15 have grades and seven have sell or underweight grades, with an average price of $ 54.72.

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