Intel (INTC) is scheduled to report results of its third fiscal quarter after the market close on October 27, with a conference call scheduled for 5:00 pm ET. What to watch for:
GUIDANCE: Along with its last report, Intel lowered its earnings and revenue guidance for fiscal 2022, cutting its adjusted earnings per share view for the period to $2.30 from $3.60 and revenue view to $65B-$68B from about $76B. At the time, analysts were expecting the company to report FY22 EPS of $3.42 on revenue of $74.34B, but those figures have since dropped to $2.15 and $65.26B, respectively. Wall Street expects Intel to report Q3 EPS of 32c on revenue of $15.25B.
HSBC INITIATION: Earlier this week, HSBC analyst Frank Lee initiated coverage of Intel with a Reduce rating and $23 price target. Despite a strategy reboot, the outlook for the the tech giant that "lost its way in recent years" remains challenging and its "struggles look set to continue," Lee told investors. The company has been losing market share in chips for personal computers and central processing units since 2018 and he thinks this trend will continue, Lee said. He has lowered his forecast for the adoption rate for Intel's server CPU platform, Sapphire Rapids, twice since Q4 of 2021 and now expects it to reach just 48% by the end of 2023, down from an earlier forecast of 60%.
DEUTSCHE BANK PT CUT: Last week, Deutsche Bank analyst Ross Seymore lowered the firm's price target on Intel to $32 from $35 and maintained a Hold rating on the shares. Fears of fundamental deterioration are "leading to very bearish investor positioning" into the Q3 results for semiconductors, Seymore told investors in a research note. Fundamentally, the analyst expects Q3 earnings season to "yield more pervasive signs of weakness" and for the second consecutive quarter, he sees downside risk to 2023 estimates.
JOB CUTS: Earlier this month, Bloomberg reported that Intel is planning a major reduction in headcount, likely numbering in the thousands, to cut costs and cope with a slowing personal-computer market. The layoffs will be announced as early as this month, with the company planning to make the move around the same time as its third-quarter earnings report on October 27, according to Bloomberg.
MOBILEYE: Yesterday, Mobileye (MBLY), an autonomous driving technology company and a unit of Intel, priced 41M shares of its Class A common stock at an initial public offering price of $21.00 per share. The deal priced above the $18.00-$20.00 target range. "A significant portion of the net proceeds from this offering will be used for repayment on a note owed to Mobileye's parent company, Intel Corporation, and Mobileye intends to use the remaining net proceeds for working capital and general corporate purposes," Mobileye has stated.
Intel
-0.41 (-1.51%)
Mobileye
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