Earnings preview

Intel’s decline in four charts

April 16, 2013
April 16, 2013

Earnings for chip giant Intel are due after the close of US trading. Wall Street analysts expect profits of $0.40 a share on sales of $12.59 billion. Dour sentiment surrounding Intel has meant shares lagged the broader rally in US equity markets this year. Year-to-date, the stock is up 5%, versus 10% for the benchmark S&P 500.

But the stock price has been a real dog since Intel’s last earnings report on Jan. 17.

That report showed profits declining 27% from the same period in the previous year.

Intel-quarterly-net-income-year-over-year-change_chart

And sales slumped 3% during the fourth quarter of 2012…

…the second straight quarter of declines.

Intel-quarterly-sales-growth-year-over-year-change_chart

Profit margins shrank sharply…

…as the company expanded away from its core, high-margin business of supplying chips for PCs, a market enduring some severe disruption. Mobile chips tend to be smaller, less complicated and cheaper than PC chips.

Intel-quarterly-gross-margin-_chart

But analysts have been bracing for far worse…

After the fourth-quarter earnings, Wall Street analysts revised their estimates higher, but in the run-up to today’s report they’ve been steadily chopping their consensus view lower. So if Intel manages to exceed these lowered expectations, that’s worth keeping in mind.

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