Intel's Q3 Beat A Good Old Fashioned Story Of Higher Sales And Wider Margins

Intel Corporation INTC's third-quarter earnings report is a "good old fashioned" beat story, analysts at Stifel said in a research report. The firm's Kevin Cassidy maintains a Buy rating on Intel's stock with an unchanged $46 price target.

Intel's third-quarter revenue rose 9.4 percent from the previous quarter and 2.4 percent from a year ago to $16.149 billion and exceeded the $15.7 billion the analyst was expecting. GAAP gross margin of 62.3 percent also exceeded the 62.3 percent expected due to higher revenue and operating expenditure controls.

Beyond the headline numbers, Intel's client computing revenue rose 8 percent from the prior quarter to $8.9 billion while unit volumes rose 5 percent and average selling price rose 1 percent over the same time period, the analyst said. This should serve as evidence that that the company's segmentation strategy in PCs is successful in maintaining its market share position.

Intel's Data Center Group saw an 11-percent jump in revenue to $4.9 billion from the prior quarter and 7 percent year over year, the analyst said. But looking forward to 2018, the segment will likely return to a 10-percent year-over-year growth rate.

Finally, Intel's earnings report signals the company is well-positioned for the future and is appropriately responding to competitive threats across many markets.

"We expect a broad based server upgrade cycle, a good pipeline of new PC CPUs for each market segment, and enough new products outside of the Intel Architecture to address emerging applications," the analyst wrote (see his track record here).

At time of publication, shares of Intel were up 5.2 percent at $43.50.

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5 Key Points From Intel's Q3 Beat

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