Is Intel Stock A Buy After Chipmaker's Second-Quarter Earnings Report?
Chipmaking giant Intel (INTC) has had a rough go lately. Intel stock has fallen hard after its last five quarterly earnings reports. However, with new leadership at the helm, some investors may be wondering: Is INTC stock a buy right now?To get more intel latest news, you can visit shine news official website.
The Santa Clara, Calif.-based company ruled the personal computer era thanks to its close partnership with Windows software maker Microsoft (MSFT) in what was called the Wintel alliance. But the growth of smartphones and other computing devices diminished its influence.
Intel had 15.6% market share last year, compared with 12.5% for No. 2 vendor Samsung. Intel's chip revenue rose 3.7% year over year to $70.2 billion as the market for central processing units for PCs and servers was robust.
On July 22, Intel easily beat Wall Street's second-quarter targets but forecast declining profit margins amid rising production costs. INTC stock tumbled 5.3% on the news.
Intel earned an adjusted $1.28 a share on sales of $19.63 billion in the June quarter. Analysts expected earnings of $1.07 a share on sales of $17.81 billion, according to FactSet. On a year-over-year basis, Intel earnings rose 4% while sales dipped a fraction.
Intel's sales now have fallen for four straight quarters year over year. But its earnings returned to growth after three consecutive flat or down quarters.
For the current quarter, Intel expects to earn an adjusted $1.10 a share on sales of $19.1 billion. Wall Street had predicted Intel earnings of $1.09 a share on sales of $18.1 billion. In the third quarter last year, Intel earned $1.11 a share on sales of $18.3 billion.
For the full year, Intel forecast adjusted earnings of $4.80 a share on sales of $77.6 billion. Analysts were looking for earnings of $4.64 a share on sales of $72.7 billion.Investors sold off Intel stock last summer after the company disclosed the delay in production of 7-nanometer scale processors. Its shares declined 21% in the week after the news.
The delay puts Intel further behind chip foundry Taiwan Semiconductor Manufacturing (TSM), which is already mass producing chips at 5-nanometer scale. Intel's current state-of-the-art chips are at 10-nanometer scale. Circuit widths on chips are measured in nanometers, which are one-billionth of a meter. Smaller circuits translate to faster, more power-efficient processors.
Intel rival Advanced Micro Devices (AMD) has been leveraging Taiwan Semiconductor's advanced process nodes to take market share in processors for PCs and servers.
On March 23, Intel said the company is making good progress with development of its 7-nanometer chips. It also announced plans to spend $20 billion to build two new semiconductor fabs in Arizona. Plus, it outlined an plan to become a major provider of foundry capacity in the U.S. and Europe to serve customers globally.