Chip behemoth Intel (INTC –Free Intel Stock Report) has reported very strong results for the September quarter and its share price rose on the news. Specifically, sales clocked in at just under $19.2 billion, which was a shade higher than the previous year tally, but sharply above our $18 billion estimate. Along the same lines, non-GAAP earnings (excludes items we believe to be nonrecurring in nature) totaled $1.42 a share, which was markedly above our $1.24 expectation.
Looking at it by segments, the PC-Centric business declined 5% on a year-to-year basis, which isn't really a cause for concern, as this unit is mature and isn't a primary venue for growth. Indeed, the Data-Centric businesses, in aggregate, climbed 6% relative to last year's comparable-period tally. These divisions also are on Wall Street's radar, which is likely a primary factor for the share-price increase following the earnings announcement.
Dissecting things a bit further, Mobileye delivered a strong performance, with a 20% increase in sales, to $229 million. Though the top-line advance was from a relatively small base, it was still a positive sign. This is one of the key areas for long-term growth, reflecting the promising prospects for autonomous cars in the years ahead.
Another interesting segment under the Datacenter umbrella is the Internet of Things. In a nutshell, this is a way to connecting ordinary devices to one another through computers. Comparisons in this division were up 9%, and crossed the $1 billion threshold. Furthermore, the Network Services Group (memory) posted a record quarter, with sales up 19%, to $1.3 billion.
Management gave strong guidance for both the fourth quarter and full-year 2019. Specifically, it looks for December-period sales to be $19.2 billion, plus or minus $300 million, while the top line for this year is likely to hit the $71 billion mark. Both tallies are markedly higher than our previous respective expectations of $18.8 billion and roughly $69.4 billion.
Guidance for share earnings is also brighter. Management now looks for December-quarter earnings per share of $1.24, with a full-year tally in the neighborhood of $4.60. These figures are also above our previous estimates of $1.21 and $4.40, respectively.
Despite the issue's run-up following the earnings announcement, we still believe the blue-chip stock has appeal for conservative investors seeking a technology holding to round out their portfolios. Intel is a well-oiled machine, and has the financial wherewithal to outpace the competition in all types of markets.
About The Company: Intel Corporation is a leading manufacturer of integrated circuits. In addition to primarily supplying manufacturers of personal computers, the company serves a multitude of other global markets, including communications, industrial automation, military, and other electronic equipment. Intel’s product line consists of microprocessors, with the Pentium series being the most notable. It also manufactures microcontrollers and memory chips, and the company sells computer modules and boards, and network products.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
– Alan House
