Intel Corporation Earnings Beat Estimates, Stock Rallies

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Intel Corporation (NASDAQ:INTC) released its latest earnings report after closing bell tonight. Intel earnings came in at $1.08 per share on an adjusted basis, smashing the consensus estimate of $87 cents per share. Intel’s Q4 revenue rose to $17.1 billion from $16.37 billion in the year-ago quarter.

Intel earnings swing to a loss

On a GAAP basis, Intel earnings of 73 cents per share in the year-ago quarter swung to a loss of 15 cents per share in Q4 of 2017. Intel management said tax impacts were to blame for the loss. The company recorded an income tax expense of $5.4 billion in connection with the tax reform bill. The impacts include a one-time transition tax on previously untaxed foreign earnings. A re-measurement of the company’s deferred tax liabilities with the new corporate tax rate partially offset that one-time tax.

Intel’s gross margin expanded to 63.1% on a GAAP basis and 64.8% on a non-GAAP basis. PC-centric revenues, which account for the chip maker’s Client Computing Group, fell 2% year over year to $9 billion. The chip maker’s Data Center Group sales grew 20% to $5.6 billion, while Internet of Things Group revenues jumped 21% to $879 million. Programmable Solutions Group revenues jumped 35% to $568 million, while Non-Volatile Memory Solutions Group revenues increased 9% to $889 million.

“The strategic investments we’ve made in areas like memory, programmable solutions, communications and autonomous driving are starting to pay off and expand Intel’s growth opportunity,” Chief Executive Officer Brian Krzanich said in a statement on the Intel earnings release. “In 2018, our highest priorities will be executing to our data-centric strategy and meeting the commitments we make to our shareholders and our customers.”

Intel’s Q1 guidance comes up short

For Q1, management expects Intel earnings to come in between 65 cents and 75 cents per share on a non-GAAP basis, which is a bit light against the consensus of 72 cents per share. The chip maker expects Q1 revenue to be around $15 billion, plus or minus $500 million. For all of 2018, the company expects revenue to be around $65 billion, plus or minus $1 billion. Management expects Intel earnings to be around $3.55 per share, plus or minus 5%, on a non-GAAP basis.

Intel stock surged by more than 4% in after-hours trades, climbing as high as $47.31 after the earnings release.

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