Leigh Drogen

About the Author Leigh Drogen

Leigh Drogen is the Founder and CEO of Estimize. Estimize is an open financial estimates platform which facilitates the aggregation of fundamental estimates from independent, buy-side, and sell-side analysts, along with those of industry experts, private investors and students. By sourcing estimates from a diverse community of individuals, Estimize provides both a more accurate and more representative view of expectations compared to sell side only data. Leigh started his career as a quant trader at Geller Capital, a White Plains, NY based fund where he ran strategies that looked at earnings acceleration and analyst estimate revision models, as well as price momentum and several sentiment indicators. Leigh later went on to be the founder of Surfview Capital, a New York based asset management firm that used many of the same strategies as Geller Capital, with a focus on higher beta names on an intermediate term time frame. His educational background includes focus in economics and international relations, specifically war theory. He is a graduate with honors from Hunter College in New York City. You can contact Leigh by emailing him at Leigh@estimize.com

Can Intel Keep Running In 2015?

Earnings season got underway Monday with industrial giant Alcoa (NYSE:AA) posting strong results and SanDisk (NASDAQ:SNDK) pre-announcing a dismal quarter which sent its shares tumbling 15% lower. Although we are only two days into the fourth quarter earnings season, within the past week we’ve seen mixed results from the semiconductor industry showing conflicting stories ahead of Intel’s (NASDAQ:INTC) highly anticipated Thursday afternoon report.

Micron Technology reported earnings last Tuesday, beating bottom line estimates by 3 to 4 cents per share but coming up lite on revenues. Micron also set guidance for the second quarter shy of what analysts had hoped for. To make matters worse, Monday SanDisk shared its alarming preliminary 4th quarter results. SanDisk pre-announced quarterly sales of $1.73 billion, well below the Wall Street consensus of $1.82 billion and the Estimize consensus of $1.83 billion.

While there are dark clouds over its peers, Intel has been nothing but hot. Last year shares of the stock appreciated 41%. The rally started at the beginning of 2014 as a positive shock to enterprise PC demand helped Intel convert is fading sales back into growth in the 4th quarter of 2013. Double digit increases in the Internet of Things and Data Centers has helped propel the company in recent quarters.

 

Last quarter Intel posted its best ever third quarter sales figure driven by 8% year over year growth. On Thursday Estimize contributors are forecasting that the rate of expansion will cool to a still favorable 7%.

Last year Intel’s Internet of Things segment was its second best performing group by year over year sales coming in at +14%, although this only accounted for less than 4% of total quarterly revenue. The Data Center Group was the company’s fastest growing component which recorded $3.7 billion in sales (25% of total) last quarter, up 16% year over year.

Intel is doing a great job with its smaller divisions, but its PC Client group still remains by far its most important, and results have been impressive there. Last quarter Intel reported PC Client Group revenue of $9.2 billion, making up 63% of total sales, and improving 9% from the comparable quarter of 2013.

Getting back to the big picture, all 3 of Intel’s major segments had a strong showing last quarter and the tech giant is setting a favorable outlook for the current period. With revenue growth firing on all cylinders and management guiding for 64% gross margins (up from 59.8% in FQ4 last year), it looks like we’re on the verge of another positive quarter if the company can keep up with its own highly set goals.