News [CNBC] Intel stock pops on earnings beat and return to growth

[Hitman928]

Intel stock pops on earnings beat and return to growth

Intel beat expectations and grew revenue slightly and gave better-than-expected guidance, sending shares up.

www.cnbc.com

More coming soon, will update as I have time to add info and comments.

 

[Abwx]

Server volume down but revenue still up. ASP are up across the board. Will be interesting to see what happens to ASP with Zen 2 as a competitor now.

View attachment 12368

So they are saying that they gained some marketshare volume wise in the server department since IDC state that total servers sales are down 9.3%.....

Worldwide Server Market Revenue Declined 11.6% Year Over Year in the Second Quarter of 2019, According to IDC

IDC examines consumer markets by devices, applications, networks, and services to provide complete solutions for succeeding in these expanding markets.

www.idc.com

 

[Hitman928]

So they are saying that they gained some marketshare volume wise in the server department since IDC state that total servers sales are down 9.3%.....

Worldwide Server Market Revenue Declined 11.6% Year Over Year in the Second Quarter of 2019, According to IDC

IDC examines consumer markets by devices, applications, networks, and services to provide complete solutions for succeeding in these expanding markets.

www.idc.com

The IDC report is for 2Q19, intel is reporting on 3Q19. Both AMD and intel said that 1H19 there was a slow down in the DC/Enterprise market as I think there was a rush to buy hardware with all the trade stuff happening last year and basically companies were stock piling components but that was expected to clear in 3Q19 and the DC/Enterprise market was expected to return to normal. We don't know market share numbers yet for 3Q19 but should know once AMD announces earnings on Tuesday, then we can see if they were down on volume y/y like intel or if they took marketshare.

 

[VirtualLarry]

Honestly, I think that this is GOOD news. I'm not the biggest fan of Intel, but I'm not their worst enemy either, and honestly, with the "barbarians at the gate" for consumer computing (The ARM-y), I think Intel beating estimates is GOOD news for the ENTIRE PC (x86/x64/AMD64) industry. I'm glad to hear it. Hopefully, AMD will have some good news too, soon, as they claim that their consumer Ryzen 3000-series CPUs are selling like 2x-3x what their first-Gen CPUs sold, in terms of unit sales at release. Here's hoping, and that they increase market-share too. (And if the AMD comment is too off-topic in this thead, please delete it mods, I apologize. I just see this news about Intel, to be good for the industry as a whole.)

 

[Gideon]

https://twitter.com/x/status/1187725715212554241

You can't find this in any of their slides, or mentioned in the call, but raw earnings (Non-GAAP) were down $700 million as well. EPS is higher because of lower tax rate and less shares outstanding.

 

[Markfw]

https://twitter.com/x/status/1187725715212554241

That looks more like reality.

 

[Hitman928]

I also find it interesting that intel is projecting flat revenue for Q4 when historically Q4 is typically their strongest quarter. I'll have to read through the earnings call to see if this was addressed at all. It will get really interesting for investors if they do have flat or even slightly higher Q/Q revenue but margins continue to fall.

 

[VirtualLarry]

I also find it interesting that intel is projecting flat revenue for Q4 when historically Q4 is typically their strongest quarter. I'll have to read through the earnings call to see if this was addressed at all. It will get really interesting for investors if they do have flat or even slightly higher Q/Q revenue but margins continue to fall.

So I was wrong in my initial estimate that this was "Good for the industry", rather, it's a smoke-and-mirrors (of sorts, it's legal) of Intel, to raise their stock prices, by use stock buy-backs, and therefore, less stock outstanding, so what earnings they have, their EPS is up over initial guidance...?

 

[Markfw]

So I was wrong in my initial estimate that this was "Good for the industry", rather, it's a smoke-and-mirrors (of sorts, it's legal) of Intel, to raise their stock prices, by use stock buy-backs, and therefore, less stock outstanding, so what earnings they have, their EPS is up over initial guidance...?

OK, even if it was BAD for Intel (which I think it is), there is no way they are going under or anything, they are just going to give up market share and struggle. and lower prices until they become competitive again. Which could come as early as 2021. I don't think next year will be anything but a struggle.

THAT is good for the computing community, server, HEDT and desktop.

 

[Hitman928]

So I was wrong in my initial estimate that this was "Good for the industry", rather, it's a smoke-and-mirrors (of sorts, it's legal) of Intel, to raise their stock prices, by use stock buy-backs, and therefore, less stock outstanding, so what earnings they have, their EPS is up over initial guidance...?

I mean, they still had record revenue so it's not like they are struggling. Basically intel is just trying to keep their reputation as this unstoppable titan intact with some numbers games because the real numbers show some chinks in the armor. Not that they're doomed or anything but there's these small cracks forming that they're trying to hide. Really I think intel will be fine at least until when they project to deliver products on 7 nm. Competitively they'll struggle and they'll lose market share and their margins will take some hits, but overall they'll be fine. Now, if the 7 nm transition is even half as bad as the 10 nm transition, then they really will be facing some trouble.

 

[DrMrLordX]

funny how some in this thread are unhappy with intel doing well.

Not really. In general, those outside of the investor class want to see profitability tied to quality of products/services. Higher revenues in the face of declining product quality is bad for consumers.

Honestly, I think that this is GOOD news. I'm not the biggest fan of Intel, but I'm not their worst enemy either, and honestly, with the "barbarians at the gate" for consumer computing (The ARM-y), I think Intel beating estimates is GOOD news for the ENTIRE PC (x86/x64/AMD64) industry.

By now you've noticed some smoke and mirrors.

 

[Thunder 57]

uh no. Companies get aggressive buying back their stock when they think they are undervalued. Not when they are scared lol. I dont think you know anything when it comes to investing or corporate actions.

Intel spent 10bln ytd buying back their own stock. They are about to spend another 20bln in the next 15-18months buying back their stock.

In addition to that they are increasing their wafer capacity 25% next year (on top of the 25%) this year.

The company is THE ONLY large semi company that has increased its guidance this year.

Wall st. estimated ASPS down 6% for PC and 3% for DCG, ASPS were up in both segments.

Wall st. estimated DCG revenues were going to be down 9%, they were up 4%

AMD has been "competitive" since 2017. While they have taken share, Intel has hit record numbers, asps, earnings. .

The amount of hate in here on the company makes no sense. Intel certainly has been doing well and has crushed bearish expectations.

"Competitive"? Rome is an absolute beast of a CPU. Whatever, good for Intel. Maybe they can start putting out more compelling products soon.

 

[scannall]

Not really. In general, those outside of the investor class want to see profitability tied to quality of products/services. Higher revenues in the face of declining product quality is bad for consumers.



By now you've noticed some smoke and mirrors.

Personally I want to see both Intel and AMD succeed. Punch each other back and forth, and work hard to top the other. Enough bean counters dribbling a bit here and there, just to milk the market.

 

[Markfw]

Personally I want to see both Intel and AMD succeed. Punch each other back and forth, and work hard to top the other. Enough bean counters dribbling a bit here and there, just to milk the market.

If I read that right, its exactly what I posted above.+

 

[Gideon]

And it seems like another 200 million was spent early by customerst to avoid upcoming tarrifs:

Intel earnings arent as good as they looked analysts say - MarketWatch

Intel Corp. reported a surprise increase in data-center revenue Thursday en route to a big earnings beat, but some are questioning the sustainability of the company’s momentum.

www.marketwatch.com

 

[DrMrLordX]

Personally I want to see both Intel and AMD succeed.

Of course. But in the techie crowd, we should want to see success in their product releases and their benchmarks more than anything else. If you see cash flowing uphill then something is wrong.

 

[JTaylor2005]

Their R&D is up over a bln dollars over the past few years. They spend 2x in R&D what AMD generates in annual revenue. What are you going on about?

What I struggle to understand then is what they have spent all that money on?! They have spent all that cash and ended up designing them self into a corner architecture wise and completely made a hash of their 10nm introduction. I suppose it must have gone on all their little side hussles like their optane stuff and other bits and pieces.

 

[moinmoin]

And it seems like another 200 million was spent early by customerst to avoid upcoming tarrifs:

Intel earnings arent as good as they looked analysts say - MarketWatch

Intel Corp. reported a surprise increase in data-center revenue Thursday en route to a big earnings beat, but some are questioning the sustainability of the company’s momentum.

www.marketwatch.com

Interesting point. Note that the 200 mil is what Intel stated. The article quotes two analysts critical of that number, both who have Intel on an underperform rating.

“In particular, enterprise server grew 50% quarter over quarter — management noted they believed $200 million of 3Q revenue was China related pull-ins, but our math suggests the impact could have been much higher, since it doesn’t make sense to us that enterprise would have accelerated in the current environment,”

 

[chrisjames61]

funny how some in this thread are unhappy with intel doing well. Company desktop cpu unit sales were up 17% sequential DESPITE Ryzen 3.

Consensus expected DGG revs down 9% yoy, they were up 4%.

ASPs up across the board. And the forward guidance was increased.

In addition, the company bought back 4.5bln dollars of equity in the quarter and added an additional 20bln of repurchase authority which they plan to use over the next 15-18months.

Does this sound like a company that is -redacted- their pants?

Profanity in the tech forums is prohibited.

Daveybrat
AT Moderator

Of course Intel is worried. They are getting hammered on every front and are losing ground to various competitors. Inertia like someone said in an earlier post. It takes a long time for these types of weaknesses to become apparent. If they don't turn things around their marketshare will erode on all fronts. Their margins will shrink further. Then things won't be so rosy.

 

[Ajay]

Stock buyback are such a con. I hope the next president reinstates the policy of prohibiting them. Companies should be valued on fundamentals, not market manipulations. /rant

 

[TheELF]

What I struggle to understand then is what they have spent all that money on?! They have spent all that cash and ended up designing them self into a corner architecture wise and completely made a hash of their 10nm introduction. I suppose it must have gone on all their little side hussles like their optane stuff and other bits and pieces.

Yup, optane DIMMS for one and 10nm for nervana artificial intelligence AI training.
Storage is the number one bottleneck for this industry,optane will give a system massive amounts of ram for a CPU to work on,no more swapping no more even reading data from disk to ram first, and AI training is what everybody uses right now,every two bit device has voice recognition right now.

For anybody that is confused on how intel has growth on server and datacenters while having less volume,just look at the optane dimm prices,anybody up for any guesstimation on what kind of margins they have on those?
In addition every server/datacenter can be filled up with several of these it's not even a one per system deal in the way that CPUs are (for the most part) .
Traditional computing is over saturated and it's only getting worse with arm and GPUs taking over a lot of it due to being so much cheaper,it's no wonder AMD tried to make ryzen be arm as well as x86...

Intel Optane DIMM Pricing: $695 for 128GB, $2595 for 256GB, $7816 for 512GB (Update)

Intel's Optane DC Persistent DIMMs have landed at retail, giving us our first glimpse of pricing.

www.tomshardware.com

10nm Ice Lake CPU Meets M.2: The 'Spring Hill' Nervana NNP-I Deep Dive

Intel shares the fine-grained details about its 10nm Ice Lake chip on an M.2 card.

www.tomshardware.com

 

[jpiniero]

Mildly interesting, Intel's desktop revenue was almost identical between Q3 2019 ($2.968B) and Q3 2017 ($2.967B).

 

[Mopetar]

Stock buyback are such a con. I hope the next president reinstates the policy of prohibiting them. Companies should be valued on fundamentals, not market manipulations. /rant

Why is it a con? If the company thinks that their stock price is low and that they will increase it in the future, it makes perfect sense for them to buy it if they have cash on hand. It also means that the company has more stock to award to key employees so that they feel more invested in the company and are more likely to stay with the company.

Unless you own shares in Intel, I'm not really sure why you care. If you think the market is behaving irrationally, then you should bet against the market. If you think Intel is trying to "manipulate" the stock price to keep it artificially high, then short it because reality will only drag it back down.

 

[DrMrLordX]

Why is it a con?

Share Buybacks May Be Bad — Just Not for the Reasons You Think

Loews Corp. CEO Jim Tisch faces a constant dilemma. When his company’s shares are cheap, he agonizes about whether to sound off about it — or stay quiet and just buy back a bunch of stock.Last year, Tisch mostly did the latter, repurchasing more than 20 million shares, or some 6 percent, of...

www.institutionalinvestor.com

There are plenty of populist anti-corporate types that hate buybacks with a passion. If you get past that hype, there's a pattern that's been established over the past 20 years or so that massive buybacks presage market downturns. They may be value-destructive. Some companies use buybacks to boost executive compensation indirectly. That's kinda slimy.

 

[liahos1]

You guys in here are incredible. Thank you all for the entertainment

 

[Markfw]

You guys in here are incredible. Thank you all for the entertainment

I think your post is funnier than the rest, since you think this thread is funny,

Actually, if you read the results carefully, they are what is funny. How Intel can polish an "excrement" and make it look like a gem.