Investing.com – Intel (NASDAQ:) on Thursday reported a stronger-than-expected outlook on profit in the upcoming quarter after topping analysts’ estimates on both the top and bottom lines, led by strong growth in its data center business.
For the first quarter, Intel said it expected to report earnings of $1.30 a share on revenue of $19 billion, above estimates for earnings of $1.03 a share and revenue of $17.2 billion.
Intel (NASDAQ:) announced earnings per share of $1.52 on revenue of $20.21 billion. Analysts polled by Investing.com anticipated EPS of $1.25 on revenue of $19.2 billion. That compared with EPS of $1.28 on revenue of $18.66 billion in the same period a year earlier. Intel had announced EPS of $1.42 on revenue of $19.19 billion in the previous quarter.
The company attributed the stronger results to rising sales for chips used in data centers and growing demand for higher performance products used in personal computers and related devices.
Revenue for its client computing group was up 1.9% to $10.01 billion. Its higher-margin data center business saw a 19% revenue increase to $7.2 billion.
“In 2019, we gained share in an expanded addressable market that demands more performance to process, move and store data,” said Bob Swan, Intel CEO. “One year into our long-term financial plan, we have outperformed our revenue and EPS expectations. Looking ahead, we are investing to win the technology inflections of the future, play a bigger role in the success of our customers and increase shareholder returns.”
Intel share’s are up 5.8% for the year to date and is trading at $63.32 , still down 0.60% from its 52 week high of $63.70 set on January 23.
“After the powerful rally this year in computer chip manufacturer shares, these companies now have little room for error. Investors have built a strong bullish case for the sector that went through a big selloff in 2018, after getting hurt by escalating trade war between the U.S. and China.Intel (NASDAQ:) is certainly well-positioned to take advantage of this strength,” Investing.com analyst Haris Anwar said.
“In 3Q earnings report, Intel (NASDAQ:) raised its full-year guidance as it benefited from the surging investments in datacenters by large corporations, such as Amazon (NASDAQ:NASDAQ:) and Microsoft (NASDAQ:NASDAQ:). On the PC side, things also look quite bright for Intel, which is the largest parts supplier for the industry,” he said.
“Fourth-quarter sales of personal computers were the best the industry has seen in years, according to data released last week by market research firms IDC and Gartner,” he added. “With these positive catalysts, Intel (NASDAQ:) needs to show that it’s making progress in overcoming its production challenges and it is on track to bring to the market the most efficient and powerful chips in the highest volumes. Intel’s biggest competitive threat right now is coming from Taiwan Semiconductor Manufacturing (NYSE:TSM), which is quickly gaining market share.”
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