Post Earnings Coverage as Intel Revenue Jumped 10 Percent; Adjusted EPS gained 4 Percent

Upcoming AWS Coverage on Microchip Technology

LONDON, UK / ACCESSWIRE / February 3, 2017 / Active Wall St. announces its post-earnings coverage on Intel Corp. (NASDAQ: INTC). The Company disclosed its fourth quarter fiscal 2016 results on January 26, 2017. The Santa Clara, California headquartered chip giant outperformed top- and bottom-line expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Intel’s competitors within the Semiconductor – Broad Line space, Microchip Technology Inc. (NASDAQ: MCHP), is expected to report earnings on February 07, 2017 after market close. The report will be for the fiscal quarter ending December 2016. AWS will be initiating a research report on Microchip Technology following the release of its earnings results.

Today, AWS is promoting its earnings coverage on INTC; touching on MCHP. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=INTC

http://www.activewallst.com/registration-3/?symbol=MCHP

Earnings Reviewed

For the three months ended on December 31, 2016, Intel posted revenue of $16.4 billion, up 10% compared to revenue of $14.9 billion in Q4 2015. The Company’s reported number topped analysts’ forecasts of $15.79 billion. Intel’s operating income totaled $4.5 billion in the reported quarter gaining 5% on a y-o-y basis.

For Q4 2016, Intel’s gross margin of 61.7% was down 2.6 points compared to Q4 2015. The Company’s non-GAAP gross margin of 63.1% in the reported quarter was down 1.7 points compared to the year earlier same quarter.

For Q4 2016, Intel posted net income of $3.6 billion, down 1% compared to net income of $3.6 billion in Q4 2015. The Company’s earnings per share of $0.73 was down $0.01 per share, or 1%, on a y-o-y basis, primarily driven by higher spending, a higher tax rate, higher amortization of acquisition-related intangibles, and restructuring and other charges, yet partially offset by higher platform average selling prices and growth in adjacent businesses. Intel’s non-GAAP earnings per share of $0.79 were up $0.03 per share or 4% on a y-o-y basis, also exceeding Wall Street’s estimates of $0.75 per share.

Intel reported FY16 revenue of $59.4 billion, operating income of $12.9 billion, net income of $10.3 billion, and EPS of $2.12. On non-GAAP basis, the Company posted revenue of $59.5 billion, operating income of $16.5 billion, net income of $13.2 billion, and EPS of $2.72 for FY16.

“The fourth quarter was a terrific finish to a record-setting and transformative year for Intel. In 2016, we took important steps to accelerate our strategy and refocus our resources while also launching exciting new products, successfully integrating Altera, and investing in growth opportunities,” said Brian Krzanich, Intel CEO.

Segment Results

For Q4 2016, Client Computing Group’s revenue rose 4% to 9.1 billion, with platform volumes down 7% and platform average selling prices up 7%. The Company’s Desktop platform volumes were down 9% and desktop platform average selling prices were up 2%, while Notebook platform volumes were flat and notebook platform average selling prices were up 3%.

During the reported quarter, Intel’s Data Center Group posted revenue of $4.7 billion, up 8% on a y-o-y basis with platform volumes up 3% and platform average selling prices grew 4%. The Company’s Internet of Things Group sales surged 16% on a y-o-y basis to $726 million in Q4 2016. Intel’s Non-Volatile Memory Solutions Group posted revenue of $816 million for Q4 2016, registering revenue growth of 25%. Revenue for Intel’s Intel Security Group came in at $550 million, reflecting a 7% y-o-y increase.

Cash Flow & Balance Sheet

For Q4 2016, Intel generated approximately $8.2 billion in cash from operations, paid dividends of $1.2 billion, and used $533 million to repurchase 15 million shares of stock. The Company generated approximately $21.8 billion in cash from operations, paid dividends of $4.9 billion, and used $2.6 billion to repurchase 81 million shares of stock for FY16. Intel ended the reported quarter with a total of $17.1 billion cash investments, down $0.7 billion compared to Q3 2016. Cash flow from operations in Q4 2016 was $8.2 billion. The Company repaid $1.5 billion of debt and ended Q4 2016 with total debt of $25.3 billion.

2017 Outlook

For Q1 2017, Intel is expecting revenue to be $14.8 billion, plus or minus $500 million. GAAP gross margin in Q1 2017 is expected to be 62%, plus or minus a couple of points, flat compared to Q4 2016. GAAP EPS is estimated to be $0.56, plus or minus $0.05 per share. Non-GAAP EPS is expected to be $0.65, plus or minus $0.05 per share, up 20% on a y-o-y basis.

For FY17, Intel is forecasting revenue to be roughly flat, while it is expected to grow in the low single digits after excluding the Intel Security Group from both years. GAAP gross margin for the year is expected to be 62%, plus or minus a couple points, up 1.1 points from FY16. GAAP EPS for FY17 is expected to be $2.53, plus or minus 5%. Non-GAAP EPS for FY17 is expected to be $2.80, plus or minus 5%. Capital spending for FY17 is estimated to be $12.0 billion, plus or minus $500 million, up $2.4 billion from FY16, primarily driven by its Non-Volatile Memory Solutions segment.

Stock Performance

On February 02, 2017, Intel’s share price finished yesterday’s trading session at $36.68, marginally advancing 0.44%. A total volume of 31.83 million shares exchanged hands, which was higher than the 3 months average volume of 20.48 million shares. Intel’s stock price rallied 7.06% in the last three months, 7.91% in the past six months, and 28.01% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 1.13%. The stock is trading at a PE ratio of 17.34 and has a dividend yield of 2.84%.

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