Intel's Earnings Were Solid, but Its Guidance Raises Some Questions - TheStreet

2017-02-01 16:03:53 by T4N
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Markets Today Intel's Earnings Were Solid, but Its Guidance Raises Some Questions Weak enterprise server demand, tougher competition from AMD and rising capital spending could partly offset the success of various growth initiatives. Eric Jhonsa Jan28,20174:18PMEST A stabilizing PC market is proving to be a nice tailwind for Intel ( INTC ) . And when combined with sizable orders from Apple ( AAPL ) , cloud giants and flash memory clients, the stage is set for a strong start to 2017. But in spite of all this, the chip giant's full-year outlook is quite subdued. Some bulls have argued Intel is just being conservative, but there are reasons to think other factors are also at work. Intel reported fourth-quarter revenue of $16.4 billion (up 10% annually) and adjusted EPS of $0.73, topping consensus analyst estimates of $15.8 billion and 75 cents. The company also guided for first-quarter revenue of $14.8 billion, plus or minus $500 million, and adjusted EPS of 65 cents. That's favorable to a pre-earnings consensus of $14.5 billion and 61 cents. Intel is only guiding for 2017 revenue to be flat relative to a 2016 level of $59.5 billion. That's officially below a pre-earnings consensus of $60.9 billion (2% growth), but the company notes its outlook implies low single-digit growth if one backs out its security software business, which won't be on the books after a pending deal to spin out the unit closes in the second quarter. 2017 EPS guidance of $2.80 is in line with prior estimates. Still, even in-line guidance seems tame given Intel's fourth-quarter results and first-quarter outlook. On its earnings call, Intel suggested its 2017 PC outlook is more conservative than that of some third parties and that it forecasts a midsingle-digit industry decline. Research firms IDC and Gartner respectively estimate PC shipments fell 1.5% and 3.7% in the fourth quarter, much smaller declines than were seen earlier in the year. Prev 0 of 3 Next If you liked this article you might like

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