What Will Intel Do After This Earnings Release?

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With shares of Intel (NASDAQ:INTC) trading around $25, is INTC an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Intel designs and manufactures integrated digital technology platforms, including microprocessors and chipsets. The company sells these platforms primarily to original equipment manufacturers, original design manufacturers, and industrial and communications equipment manufacturers in the computing and communications industries. Intel’s platforms are used in a range of applications such as personal computers, data centers, tablets, smartphones, automobiles, automated factory systems, and medical devices.

In the final quarter of 2013, profits at the Santa Clara, California-based chipmaker Intel rose. The company’s stronger results and industry data both suggest the struggling personal computer market has begun to stabilize. Early evidence that the declines in PC sales had reached bottom gave Intel investors faith in the company’s future financial health, and they responded by bidding shares up 13 percent; the stock advanced more than 28 percent throughout 2013. But the fact that the chipmaker gave disappointing revenue guidance for 2014 concerned investors, causing shares to drop as much as 3 percent following the release of earnings on Thursday after the markets closed. Even company CEO Brian Krzanich noted in the earnings press release that Intel “had a solid fourth-quarter.”

A solid quarter for Intel meant that the PC market was showing “signs of stabilization” and that the company had experienced “financial growth from a year ago,” according to Krzanich. For the fourth-quarter, Intel’s financial growth amounted to a 6.4 percent increase in net income. Net income totaled $2.63 billion, or 51 cents per share, missing Wall Street’s bottom-line forecast, while revenue rose to $13.83 billion from $13.48 billion. Analysts had expected Intel to earn 52 cents per share on revenue of $13.7 billion.

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