Wall Street sees Q2 EPS 10c, revenue $12.94B Intel (INTC) is scheduled to report results of its fiscal second quarter after the market close on August 1, with a conference call scheduled for 5:00 pm ET. What to watch for:
GUIDANCE: Along with its last report, Intel guided for Q2 earnings per share of 10c on revenue of $12.5B-$13.5B. At the time, analysts were expecting the company to report Q2 EPS of 24c on revenue of $12.68B, but the revenue figure has since changed to $12.94B while the EPS estimate remains unchanged. Of note, Intel said in early May that it expects its Q2 revenue to come in below the midpoint after the company said the U.S. Department of Commerce was revoking some licenses for exports.
CITI: In early June, Citi analyst Christopher Danely said that, after spending time with Intel at the firm's Singapore conference, he is more confident that the company has a good chance to catch up to TSMC (TSM) in manufacturing in the second half of 2025. Intel's five nodes in four years strategy is more like three nodes in four years given Intel 7 is a rebranded 10nm and the similarities between Intel 4/Intel 3 and Intel 20A/18A, the analyst tells investors in a research note. The firm says Intel is spreading out manufacturing innovations at different nodes versus TSMC incorporating multiple technologies at 2nm, which it believes is causing TSMC to spend more time at the 3nm node. If Intel continues to execute, it could be even with TSMC in manufacturing by 2025, contends Citi. Nonetheless, the firm maintained a Neutral rating on Intel shares, saying it remains skeptical that foundry will ever work.
JOB CUTS: Earlier this week, Bloomberg reported that Intel may unveil plans as early as this week to cut thousands of jobs to reduce costs and fund a rebound from an earnings slump and market share losses. CEO Pat Gelsinger is embarking on an ambitious effort to regain share as the chipmaker spends on research, development and new plants, according to people familiar with the company's plans.
FOREIGN EXPORTS: The U.S. plans to unveil a new rule to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, Reuters' Karen Freifeld reported. Shipments from allies that export key chipmaking equipment, including Japan, the Netherlands and South Korea, will be excluded, limiting the impact of the rule, according to two sources familiar with the matter. Major chip equipment manufacturers such as ASML (ASML) would not be impacted, according to the report.
ELECTION IMPLICATIONS: Earlier this month, Bloomberg reported that the Biden administration is considering a wide-sweeping crackdown to clamp down on companies exporting their chipmaking equipment to China if companies such as Tokyo Electron (TOELY) and ASML continue giving the country access to advanced semiconductor technology. According to people familiar with the matter, the U.S. is considering whether to impose a measure called the foreign direct product rule, which lets the country impose controls on foreign-made products that use even the tiniest amount of American technology.
Meanwhile, former president and current presidential candidate Donald Trump said around the same time that Taiwan should pay the U.S. for defense, in an interview with Bloomberg Businessweek. The former president also claimed Taiwan took "about 100%" of America's semiconductor business.
