Intel Corporation INTC is set to announce its fourth-quarter 2023 results on January 25 after the market closes. Market analysts anticipate an increase in revenues from the Client Computing Group (CCG) owing to the company’s robust focus on product innovation. Intel’s emphasis on enhancing semiconductor manufacturing efficiency and revamping its supply chain are expected to have a positive impact on earnings.
Facets at Play
CCG is the primary revenue driver for Intel and encompasses computer CPUs, server boards, form factor systems, and graphic products. In the fourth quarter, the company launched cutting-edge Intel Arc A580 desktop graphics, featuring AI-enhanced Intel Xe Super Sampling and hardware-accelerated ray tracing, providing a top-notch gaming experience. Additionally, the introduction of the Intel Core 14th Gen Desktop Processors, such as i9-14900K and i7-14700K, is expected to have a positive impact on revenues. These processors offer exceptional connectivity and compatibility with 600/700-series chipsets, catering to the needs of gamers and creators.
In the same quarter, Intel unveiled the Intel Core Ultra mobile processors for AI PCs, incorporating a neural processing unit for power-efficient AI acceleration and enhanced 3D graphics performance, enhancing the gaming experience. These product introductions are likely to be reflected in the upcoming financial results.
Key Developments in Q4
During the fourth quarter, Intel announced an agreement with the Israeli government to invest $25 billion in expanding its chip manufacturing facility in Israel, marking one of the largest investments in the country. The expansion is expected to generate significant employment opportunities and foster economic growth in the region, equipping Intel to fortify its leading position in the semiconductor industry and enhance its supply chain mechanism amidst the prevailing disruption.
Furthermore, Intel inked a memorandum of understanding with Siemens AG, a leading semiconductor company, to enhance production efficiency and sustainability in semiconductor manufacturing.
Overall Expectations
Market consensus estimates project revenues of $8,324.97 million from the CCG segment, indicating a substantial increase from $6,625 million in the corresponding quarter last year. The overall revenue estimate for the quarter is $15,140 million, signaling growth from the prior-year reported figure of $14,042 million. The consensus estimate for adjusted earnings per share stands at 44 cents, suggesting strong growth from 10 cents reported in the previous year.
Earnings Whispers
However, our robust model does not conclusively predict an earnings beat for Intel this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the likelihood of an earnings beat. Unfortunately, Intel’s Earnings ESP stands at -0.32%, indicating a less favorable scenario this time.
Intel currently holds a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some companies that our model indicates could post an earnings beat this season:
InterDigital, Inc. IDCC is set to release quarterly numbers on February 15, with an Earnings ESP of +1.93% and a Zacks Rank #2.
The Earnings ESP for NVIDIA Corporation NVDA is +3.68%, coupled with a Zacks Rank of 1, and the company is scheduled to report quarterly numbers on February 28.
Meta Platforms, Inc. META has an Earnings ESP of +1.46% and holds a Zacks Rank of 2. The company is set to report its quarterly numbers on February 1.
Keep track of upcoming earnings announcements using the Zacks Earnings Calendar.
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Find detailed reports on the earnings of Intel Corporation (INTC), NVIDIA Corporation (NVDA), InterDigital, Inc. (IDCC), and Meta Platforms, Inc. (META) here.
Source: Zacks Investment Research
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