Intel Corporation posted better-than-expected 1Q results. However, shares of the tech giant dipped 2.8% in Thursday’s extended trading session after closing 1.8% lower on the day.
Intel (INTC) reported 1Q adjusted earnings of $1.39 per share, down 1% on a year-over-year basis but handily beat the Street’s estimates of $1.15 per share. Revenue remained flat at $18.6 billion but topped analysts’ expectations of $17.86 billion. Notably, both EPS and revenue exceeded the company’s guidance provided in January.
The company’s Client Computing Group (CCG) segment, Internet of Things Group (IOTG), and Mobileye recorded 8%, 4%, and 48% year-over-year jumps in revenues. Additionally, PC unit volumes surged 38% and notebook volumes set a new record.
Meanwhile, Data Center Group (DCG) recorded a 20% decline in revenue but witnessed an initial recovery of Enterprise and Government sales.
Intel CEO Pat Gelsinger said, “The response to our new IDM 2.0 strategy has been extraordinary, our product roadmap is gaining momentum, and we’re rapidly progressing our plans with re-invigorated focus on innovation and execution.” (See Intel stock analysis on TipRanks)
For 2Q, the company projects adjusted revenue of $17.8 billion, higher than the consensus estimate of $17.55 billion. Moreover, non-GAAP earnings is expected to be $1.05 per share, versus analysts’ expectations of $1.09.
For 2021, the company projects adjusted revenue and non-GAAP earnings to be $72.5 billion and $4.60 per share, respectively. The consensus estimates for revenue and earnings are pegged at $72.19 billion and $4.58 per share, respectively.
Following the 1Q results, Mizuho Securities analyst Vijay Rakesh reiterated a Buy rating and a price target of $72 (15% upside potential), along with adjusting estimates for the June quarter, 2021, and 2022.
Rakesh believes “INTC is well positioned, with ~$10B+ of FCF/year, ~2% dividend yield, 10nm ramp, better availability on Ice Lake for hyperscale/Enterprise versus tight supply at AMD/TSMC, and INTC entering a new ~$100B TAM by 2025 foundry market.”
Overall, the stock has a Hold consensus rating based on 11 Buys, 10 Holds, and 7 Sells. The average analyst price target of $67.52 implies almost 8% upside potential from current levels. Shares have increased 26% so far this year.
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