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Technology

Intel Corporation Earnings: Healthy Numbers, Weak Guidance!

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Despite posting strong results, shares of the $177 billion company dropped over 5%, as the guidance for Q4FY16 came out weak

Semi-conductor giant Intel Corporation (NASDAQ:INTC) reported earnings for the third quarter of 2016, beating the Street’s topline and bottom-line estimates. Intel reported revenue of $15.8 billion vs. the Street’s estimate of $15.55 billion, this translates into a 9% YoY increase in its topline. The bottom-line of the company stood at $3.4 billion, which also implies a 9% YoY increase. The Santa Clara-based company reported a quarterly EPS of $0.80 vs. the Street’s estimate of $0.77. Despite posting strong results, shares of the $177 billion company dropped over 5%, as the guidance for Q4FY16 came out weak.

Client computing group and Internet of Things divisions reported over 20% growth, contributing to the topline of the company. Operations were impressive, as they generated cash of $5.8 billion. CEO Brian Krzanich expressed his gratitude over the earnings, while he said that the company was able to break many records in its quarter.

Future guidance remains weak, as the company expects revenue of $15.7 billion for Q4FY16, while the gross margins are also expected to drop. The Country Caller is pretty convinced with the numbers, while stock prices are expected to stabilize after a few bearish sessions. The company’s financial management appears strong, while it seems to be a lucrative option for long term investors, as cloud computing might lure its benefits in the future.

The Street remains optimistic about the company’s future, as renowned brokerages such as Wells Fargo and Barclays PLC reckon higher upsides. However, a few brokerages such as Sanford C. Bernstein reckon downsides from the current levels. The consensus price target (PT) on the stock is $39.94, which offers a decent upside from yesterday’s close.

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