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Live Nasdaq 100 Earnings: Apple (AAPL) and Intel (INTC) Go Separate Ways After Earnings
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Intel issues weak guidance
While results were better than expected, Intel’s outlook for the first quarter fell short of analyst forecasts.
Management guided revenue to a range between $11.7 billion and $12.7 billion, below the consensus estimate of $12.86 billion. Intel also expects EPS to range from a loss of $0.27 per share to $0.00, a range wide enough to drive a truck through. It was also a big miss to the $0.09 per share Wall Street was looking for.
Intel said its weak Q1 guidance was the result of seasonal weakness that is being “magnified” by macroeconomic uncertainties, ongoing inventory corrections, and competitive pressures.
Apple typically doesn’t provide guidance in its release.
Apple (NASDAQ:AAPL) and Intel (NASDAQ:INTC) reported earnings after the stock market closed today.
Both tech stocks were not expected to fare well this earnings season with sales and profits expected to be weak. Apple was reportedly struggling with iPhone sales worldwide, but especially in China, while Intel would be hit with weak PC sales and loss of market share in the data center market.
Apple Q1 earnings
| Guidance | Actual | Wall Street est. | Beat (Miss) | |
| Revenue | Up low- to mid-single digits | $124.3 billion | $124 billion | 0.2% |
| EPS | n/a | $2.40 | $2.34 | 2.6% |
| Gross margin | 46% to 47% | 46.9% | n/a | 0% |
Wall Street’s outlook for Apple was pretty dour ahead of its earnings report, with the tech giant’s stock suffering multiple downgrades and lowered one-year price targets from analysts.
Jefferies analyst Edison Lee lowered his rating on AAPL stock to underperform and dropped his price target from $275 per share to $235 per share as he expected the consumer electronics giant to report pressured iPhone sales in China. His checks found sales there fell 15% to 20% from last year.
Analysts at Canalys and IDC agree, indicating Apple lost 1% of its market share in the quarter.
iPhone sales did fall in the quarter, but less than 1% to 69.1 million units as sales tumbled 11% in China to $18.5 billion. Wall Street had expected $21.5 billion. However, sales were up in every other region with sales rising 11% in Europe and 13% in Japan.
Services revenue continued growing, rising 13.9% to $26.3 billion.
Intel Q4 Earnings
| Guidance | Actual | Wall St. est. | Beat (Miss) | |
| Revenue | $13.3 billion to $14.3 billion | $13.8 billion | $13.8 billion | 3.6% |
| EPS | $0.12 | $0.13 | $0.12 | 8.3% |
| Gross margin | 39.5% | 42.1% | n/a | 6.6% |
One of the things analysts were looking for from Intel was a new CEO. Pat Gelsinger announced his immediate retirement in December with executives David Zinsner and Michelle Johnston Holthaus serving as co-CEOs on an interim basis.
Ahead of earnings, Bernstein analyst Stacy Rasgon told investors in a note he maintained his market perform rating on the stock, but “It would seem to us that the plans of the (unknown) future CEO and the Board of Directors would matter much more than whether PCs or servers beat or miss (estimates).”
Intel, though, did better than expected, beating guidance and analyst expectations on top and bottom line numbers, as well as on gross margins.
“Our renewed focus on strengthening and simplifying our product portfolio, combined with continued progress on our process roadmap, is positioning us to better serve the needs of our customers,” Johnston Holthaus said in a statement.
Intel products revenue continued to fall as client computing revenue, its largest contributor, fell 9% to $8 billion, while data center and AI sales were down 3%. Its foundry business, that it broke out into a separate reporting unit, suffered a 13% drop in revenue. Overall, sales were down 7% to $14.3 billion, which was the top-end of management’s guidance.
However, no mention was made of a new CEO in Intel’s press release.
Immediate market impact
AAPL stock closed at $237.59 , down 0.7%, and was falling slightly in after-hours trading, down 0.7%.
INTC stock closed at $20.01, up 1.3%, and was rising 3.5% higher immediately after the report in after-hours trading.
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