Intel Corporation INTC reported first quarter earnings of 89 cents a share on revenue of $16.1 billion, slightly beating Street estimates that were muted on low expectations for the semiconductor industry as a whole. But even with the earnings beat, lowered expectations for next quarter and the year sent the chipmaker's stock dropping.
Analysts had expected quarterly earnings of 87 cents a share on revenue of $16.02 billion.
Sales were also up slightly over the previous year quarter. The company saw PC-centric business grow by 4 percent, but saw a revenue decline of 5 percent in its data-centric business.
Lowering Guidance
Intel issued lower second-quarter guidance, however, projecting EPS of 89 cents, down from the $1.01 estimate and sales of $15.6 billion, down from $16.85 billion estimate. Fiscal year 2019 EPS guidance of $4.35 is also down from $4.51 and estimated sales of $69 billion versus $71.1 billion.
"Results for the first quarter were slightly higher than our January expectations,” CEO Robert Swan, who was named permanent CEO during the quarter after serving as interim.
“Looking ahead, we're taking a more cautious view of the year, although we expect market conditions to improve in the second half," said Swan. "Our team is focused on expanding our market opportunity, accelerating our innovation and improving execution while evolving our culture. We aim to capitalize on key technology inflections that set us up to play a larger role in our customers’ success, while improving returns for our owners."
Highlights
- Gross margins of 56.6 percent vs. 60.6 percent in Q1 2018
- Net income of $4 billion, down 11 percent from $4.5 billion Q1 2018
- EPS 87 cents, down 6 percent from 93 cents in Q1 2018
Intel shares fell sharply in after-hours trading, down 6.3 percent to $53.94 at time of publication.
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