Intel Earnings Beat Fails to Impress Investors

Intel Corp. (NASDAQ: INTC) reported its fourth quarter financial results after the markets closed on Thursday. The company had $0.74 in earnings per share (EPS) on $14.9 billion in revenue compared to consensus estimates from Thomson Reuters that called for $0.63 in EPS on $14.80 billion in revenue. The same period from the previous year had $0.74 in EPS on $14.72 billion in revenue.

During the quarter, Data Center and the Internet of Things (IoT) groups had record quarterly income, not to mention a record full-year income as well.

The cash dividend was also increased during this quarter to $1.04 on an annual basis, an increase of 8.3%.

In terms of guidance, the company expects to have revenues of roughly $14.1 billion, give or take $500,000, and a gross margin of 62% in the first quarter of 2016. There are consensus estimates that call for $0.50 in EPS on $13.86 billion in revenue.

This outlook includes the expected results of the recently completed acquisition of Altera.

The company posted its fourth quarter segment results as:

• Client Computing Group revenue of $8.8 billion, up 3% sequentially and down 1% year-over-year.
• Data Center Group revenue of $4.3 billion, up 4% sequentially and up 5% year-over-year.
• Internet of Things Group revenue of $625 million, up 8% sequentially and up 6% year-over-year.
• Software and services operating segments revenue of $543 million, down 2% sequentially and down 3% year-over-year.
• Non-Volatile Memory Solution Group revenue was flat sequentially and up 10% year-over-year.

Brian Krzanich, CEO of Intel, commented on earnings:

Our results for the fourth quarter marked a strong finish to the year and were consistent with expectations. Our 2015 results demonstrate that Intel is evolving and our strategy is working. This year, we’ll continue to drive growth by powering the infrastructure for an increasingly smart and connected world.

So far in 2016, this company has outperformed the broad markets with the stock only down about 7% year to date. Over the past 52-weeks the stock is down nearly 10%.

Shares of Intel closed Thursday up 2.6% at $32.74, with a consensus analyst price target of $36.49 and a 52-week trading range of $24.87 to $37.03. Following the release of the earnings report, the stock was down 3.6% at $31.56 in the after-hours trading session.