Intel signals 2020 will be a turnaround year for chip industry leader

Joanna Estrada
January 26, 2020

This article is being republished as part of our daily reproduction of articles that also appeared in the USA print edition of The Wall Street Journal (January 24, 2020). The firm's fourth-quarter earnings also handily beat analyst estimates.

For the fourth quarter, Intel said that it had $1.52 in earnings per share (EPS) and $20.21 billion in revenue.

Analysts had been looking ahead to revenue of $19.2 billion. The firm's revenue for the quarter was up 8.3% on a year-over-year basis.

NextEra Energy (NYSE:NEE), the parent company of Florida Power&Light, meanwhile overcame an initial dip premarket to rise 0.7%, as it reiterated its ultra-bullish guidance for the next three years. Taiwan Semiconductor Manufacturing Co. Clean Yield Group now owns 11,689 shares of the chip maker's stock valued at $602,000 after buying an additional 8,967 shares during the last quarter.

In other Tesla news, SVP Andrew D. Baglino sold 2,366 shares of the firm's stock in a transaction on Wednesday, October 30th. Sales, it said, should reach about $73.5 billion. Equities analysts forecast that Intel Co. will post 4.61 earnings per share for the current year.

Intel said it would release nine 10nanometer (nm) products this year and launch its lead 7nm product next year.

In the market for data center processors, analysts at Nomura Instinet and Mizuho Securities predict AMD's share will climb as high as 15% by the end of the year, up from about 5% in 2019 and 3% a year earlier. Its recent rally has been spurred by the company's growth in graphics, computing and enterprise chips. The firm now has a "buy" rating on the chip maker's stock. This is a positive change from Intel's previous quarterly dividend of $0.32.

Chief Executive Bob Swan said the company was outperforming revenue and earnings expectations in its long-term financial plan.

Management, however, tempered expectations for the remainder of 2020 with Intel's forecast implying Q2 through Q4 will show an aggregate decline in revenue. Captrust Financial Advisors now owns 378,653 shares of the chip maker's stock worth $18,126,000 after acquiring an additional 88,955 shares during the period. The chip maker's PC division posted modest growth. Only the small programmable solutions group, which sells reprogrammable chips, saw sales slide 17% to $505 million. Morningstar Investment Services LLC purchased a new stake in shares of Intel in the 2nd quarter valued at $7,387,000.

The company has been slow developing the tiniest transistors it has ever made, measuring roughly 10 nanometers in length, or less than 10 thousandths the width of a human hair. Analysts have suggested Intel is a least a year behind AMD in producing a 10-nanometer microprocessor unit used for personal computers.

Even though Intel boosted processor production in the second half of a year ago, Mr. Swan told analysts on a conference call that "supply remains tight".

But that lag has allowed Advanced Micro Devices Inc., Intel's main chip-making rival, to win market share. All of AMD's gains are coming at the expense of Intel, which has long dominated the server chip market. Intel's market share in chips for new laptops fell from nearly 96% at the beginning of 2018 to 82.5% late past year, according to Susquehanna Financial Group research.

Be taught about the video above for more on Intel. -China trade tussle that has added tariffs and red tape to dealings with customers and suppliers in the world's second-largest economy.

However, Intel's Davis cautioned that the positive forecast was not directly attributable to the trade deal signed between USA and Chinese officials last week.

Other reports by Click Lancashire

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