Intel Earnings Preview: Will It Walk the Talk?

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The numbers we hear from Intel Corp. (NASDAQ: INTC) when it reports second-quarter results after markets close Thursday will be important, but likely not as important as what the company has to say about its search for a new chief executive officer to replace Brian Krzanich, who resigned last month. Chief financial officer and interim CEO, Robert Swan, has said he’s not interested in being the permanent CEO.

The consensus estimate for earnings per share (EPS) is $0.96, and revenue is forecast at $16.76 billion. In the year-ago quarter, Intel reported EPS of $0.72 and revenue of $14.76 billion. When Intel announced that Krzanich was leaving, the company also said it expected to post second-quarter adjusted EPS of $0.99 and $16.9 billion in revenue.

Those numbers are pretty solid for a company Intel’s size: revenue forecast up 13.5% and EPS up 33%. Smaller rival AMD yesterday reported revenue growth of 53% year over year for the quarter and up from a loss of one penny per share a year ago to $0.14 per share this year.

A few months ago, Intel pushed out its new manufacturing process intro until next year, which some analysts see as a further opening for AMD. Intel could offer more specifics about a timetable in today’s report.

Here are some recent ratings and price targets:

  • Royal Bank of Canada: initiated with a Neutral rating with $60 price target
  • Stifel Nicolaus: reiterated as Neutral with $60 price target
  • KeyCorp: reiterated Overweight rating; price target lowered from $65 to $60
  • Goldman Sachs: reiterated Neutral rating and $53 price target
  • Sanford C. Bernstein: downgraded from Market Perform to Underperform; lowered price target from $54 to $42
  • Nomura: downgraded from Buy to Neutral and price target lowered from $60 to $55

We also took a look earlier this week at the Merrill Lynch chip stocks and included Intel among a group of four that continue to have solid upside.

Shares traded down at $52.33 shortly before the noon hour on Thursday. The stock’s 52-week range is $33.23 to $57.60, and the 12-month consensus price target is $58.87.