Thursday, April 16, 2015

Intel Up 2% After Reporting Flat Year-Over-Year Revenue Growth

Intel reported its first-quarter financial performance today following the bell, including revenue of $12.8 billion, and per-share profit of $0.41. The street had expected $12.9 billion in revenue, and $0.41 in per-share profit. Intel is up around 3 percent in after-hours trading.
The company expects to generate $13.2 billion in the second quarter leading to a gross margin of 62 percent and a tax rate of around 20 percent. Those figures are improvements on the company’s most recent quarter, when it had a gross margin of 60.5 percent and a tax rate of a far steeper 25.5 percent.
Given those upward corrections, Intel could be working toward stronger per-share profit in the period. The street expects Intel to generate $0.48 in profit per share on $13.51 billion in revenue in the quarter.
Intel has long been a functional bellwether for the PC market.
Intel missed on revenue in its concluded quarter, and its estimates for the current quarter are also under expectations. However, the company’s consistent increase in its gross margin could indicate stronger future cash flows, lessening the need for raw revenue growth.
For its first quarter, Intel was blunt: “PC business down […] Client Computing Group revenue of $7.4 billion, down 16 percent sequentially and down 8 percent year-over-year.” That doesn’t bode well for other players in the PC space, including Microsoft, HP and the other usual suspects. Intel has long been a functional bellwether for the PC market.
Intel’s Data Center Group saw its top line expand 19 percent compared to the year-ago quarter, while the company’s Internet of Things Group picked up 11 percent more revenue than last year’s first quarter. Intel remains a company in transition away from the primal past of the PC’s fading hegemony. And it’s doing so while boosting implied gross profit. Investors seem at least mildly enthused.

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