Intel Earnings Miss a Key Estimate  

Intel Corp. (NASDAQ: INTC) reported second-quarter 2018 results after markets closed Thursday. The semiconductor maker reported adjusted diluted earnings per share (EPS) of $1.04 on revenue of $17 billion. In the same period a year ago, the company reported earnings per share (EPS) of $0.72 on revenue of $14.8 billion. Second-quarter results compare to the consensus estimates for EPS of $0.96 and $16.7 billion in revenue.

Cash flow from operations for the first six months of the year totaled $13.7 billion and free cash flow totaled $6.26 billion. The number investors and analysts are likely to focus on, however, is Intel’s data-center group revenue growth of 27% to $5.61 billion. Intel missed, reporting $5.5 billion in revenue.

The company had nothing to say in its announcement regarding a replacement for former CEO Brian Krzanich. He’s only been gone about a month so a new CEO was not really in the cards. Still, maybe some clever analyst will think to ask about it during the conference call.

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Interim CEO, Bob Swan, said:

After five decades in tech, Intel is poised to deliver our third record year in a row. We are uniquely positioned to capitalize on the need to process, store and move data, which has never been more pervasive or more valuable. Intel is now competing for a $260 billion market opportunity, and our second quarter results show that we’re winning. As a result of the continued strength we are seeing across the business, we are raising our full year revenue and earnings outlook

Intel boosted its annual dividend last quarter by 10% to $1.20 per share and paid out $1.4 billion in dividends in the quarter. The company repurchased 76 million shares and has $7.2 billion remaining in its authorized buyback account.

For the third quarter, Intel guided revenue at $17.6 to $18.6 billion and EPS of $1.04 to $1.14. The consensus estimate calls for EPS of $1.08 and revenue of $17.65 billion.

For the full fiscal year, Intel guided revenue to $68.5 to $70.5 billion compared with fiscal 2017 revenue of $62.08 billion. Full year operating margins are forecast at 30.5% and full-year adjusted EPS is forecast in a range of around $3.95 to $4.35. The consensus estimate calls for EPS of $4.01 and revenue of $68.43 billion.

Intel’s shares traded down about 3.2% in after-hours trading, at $50.44 in a 52-week range of $33.23 to $57.60 and the 12-month consensus price target was $58.87 before today’s results were announced.

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