Wall Street sees Q4 EPS $1.10 on revenue of $17.5B
Intel (INTC) is scheduled to report results of its fourth fiscal quarter after the market close on January 21, with a conference call scheduled for 5:00 pm ET. What to watch for:
1. GUIDANCE: Along with its last report, Intel guided for Q4 adjusted earnings per share of $1.10 on revenue of $17.4B. At the time, analysts were expecting the company to report EPS of $1.06 on revenue of $17.34B, but those figures have since risen to $1.10 and $17.5B, respectively. Additionally, Intel in its last report updated its guidance for fiscal 2020, raising its FY20 adjusted EPS view to $4.90 from $4.85 and raising its FY20 revenue view to $75.3B from $75.13B. Analysts expect the company to report FY20 EPS of $4.90 on revenue of $75.4B. Meanwhile, Intel said on January 13 that it expects its Q4 revenue and EPS to exceed the previously provided guidance ranges.
2. NEW CEO: The guidance update in January came with an announcement that Intel chief executive officer Bob Swan will step down from his role on February 15, 2021, with VMware (VMW) CEO Pat Gelsinger named to succeed Swan as Intel CEO. Gelsinger will also join the Intel board of directors upon assuming the role. Following the announcement, multiple analysts upgraded Intel's stock, with BMO Capital analyst Ambrish Srivasteva upgrading Intel to Outperform from Market Perform. Srivasteva said that Gelsinger's experience running VMware makes him the right person who can address the "daunting, but not insurmountable challenges" that Intel faces.
3. THIRD POINT: The news of a CEO change followed a CNBC report from several weeks earlier, in which Scott Wapner reported that Third Point was urging Intel to explore strategic alternatives. In response, Intel at the time said it "welcomes input from all investors regarding enhanced shareholder value," adding that it looks forward to engaging with the firm on their ideas. In a letter sent to Intel's chairman, Third Point questioned whether Intel should remain an integrated device manufacturer, Reuters had reported. On January 6, CNBC's David Faber reported that Third Point's Dan Loeb had met with Intel's Bob Swan and was planning to meet again. Following the news of Swan's departure, Loeb said via Twitter: "Swan is a class act and did the right thing for all stake holders stepping aside for Gelsinger."
4. OUTSOURCING: Earlier this month, Bloomberg reported that Intel had held talks with TSMC (TSM) and Samsung (SSNLF) about the companies making some of its best chips, though the Silicon Valley giant was still holding out hope for last-minute improvements in its own output capabilities. Several days later, Bloomberg reported that Intel intends to outsource production of a new-generation graphics to TMSC. The chip, called "DG2", will be made on a new chipmaking process at TSMC that has not yet been formally named but is an enhanced version of its 7-nanometer process, according to Bloomberg.
Keywords: fly intel, earnings, guidance, ceo, third point, dan loeb