Intel Corporation INTC is set to unveil its second-quarter 2024 financial results on August 1, following the close of market trading. The upcoming report is anticipated to reflect a surge in revenues compared to the prior year within the Client Computing Group, attributable to a robust focus on product innovation. The company’s endeavors to enhance semiconductor manufacturing efficiency and optimize the supply chain have also contributed positively to this trend.
Factors Influencing Performance
The Client Computing Group (CCG) stands as Intel’s largest segment, representing a significant portion of its overall revenues. This division encompasses computer CPUs, diverse server boards, form factor systems, and graphic products.
Over the second quarter, Intel made headlines by surpassing 500 AI models tailored for the Intel Core Ultra processors. These models encompass a broad spectrum of AI applications, spanning across large language models, diffusion, super resolution, object detection, and computer vision. The adaptability of these AI applications to various processing units like CPU, GPU, and Neural Processing Unit (NPU) within the Ultra Core processors has notably reinforced Intel’s footing in the budding realm of AI-powered PCs.
Progressing steadily towards its objective of shipping over 40 million AI PC processors in 2024, Intel is extending its AI presence to edge devices and PCs via Core Ultra processors, supporting a plethora of software vendors.
During the quarter under review, Intel introduced the Lunar Lake architecture at Computex 2024. The upcoming Lunar Lake processors are poised to enhance Neural Processing Unit capabilities, ushering in substantial performance upgrades in AI-driven PCs. Promising advanced graphics and AI processing prowess, this solution is projected to ameliorate security features, battery lifespan, and power efficiency of devices. These strategic developments likely spurred revenue growth within this segment.
Revenue and Earnings Projections
The Zacks Consensus Estimate indicates revenues of $7.51 billion from the CCG segment, reflecting an upsurge from $6.78 billion reported in the corresponding quarter of the previous year. Our internal forecast for segment revenues stands at $7.43 billion, signaling a healthy year-over-year growth of 9.7%.
For the June quarter, the Zacks Consensus Estimate projects total revenues at $12.92 billion, depicting a slight decline from the previous year’s figure of $12.95 billion. The consensus estimate for adjusted earnings per share is 10 cents, showing a decrease from 13 cents recorded in the comparative period.
Earnings Outlook
Our analytical model does not definitively predict an earnings beat for Intel in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) generally heightens the likelihood of an earnings outperformance. However, this scenario does not apply in this instance.
Earnings ESP: The Earnings ESP stands at +10.79%, with the Most Accurate Estimate at 11 cents, while the Zacks Consensus Estimate remains at 10 cents.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel currently holds a Zacks Rank #4 (Sell).
Other Stock Considerations
For investors seeking potential opportunities, certain companies exhibit promising traits for a prospective earnings beat:
Fortinet FTNT is slated to announce its quarterly results on August 6, boasting an Earnings ESP of +3.41% and a Zacks Rank #3.
BWX Technologies BWXT presents an Earnings ESP of +0.88% with a Zacks Rank of 3, with the earnings report scheduled for August 5.
Watts Water Technologies WTS showcases an Earnings ESP of +1.17% alongside a Zacks Rank of 3, with quarterly results slated for August 7.
