Can Intel (INTC) Surpass Expectations With Its Q2 Earnings?

NASDAQ: INTC | Intel Corporation News, Ratings, and Charts

INTC – Intel Corp. (INTC) is slated to announce its second-quarter earnings on August 1. However, analysts are predicting a decline in EPS and a modest revenue increase compared to last year. Can INTC exceed these projections with its upcoming earnings report? Read on to find out….

Intel Corporation (INTC - Get Rating), a titan in the world of semiconductors, will report its fiscal 2024 second-quarter earnings on August 1. In this piece, we will determine whether Intel can surpass earnings expectations in its upcoming report.

For the second quarter (ended June 2024), analysts expect a slight year-over-year revenue increase to $13.02 billion, contrasting with the 8.6% growth seen in the preceding quarter. The company’s adjusted earnings per share are forecasted to sit at $0.10, down 19.5% year-over-year. Nevertheless, the company has an impressive surprise history, beating the consensus revenue estimates in three of the trailing four quarters.

Intel’s latest financial performance has been robust, driven by solid innovation across its client, edge, and data center portfolios. The company delivered double-digit revenue growth in its products, with total Intel Products revenue reaching $11.90 billion in the first quarter of 2024, a 17% year-over-year increase. Revenue from the Client Computing Group (CCG) rose 31% year-over-year.

While the company’s first-quarter revenue of $12.72 billion fell short of the forecasted $12.78 billion, the adjusted EPS of $0.18 surpassed analysts’ expectations of a loss per share of $0.15. Given this performance, there is potential for another beat in the upcoming earnings report.

For the second quarter, Intel expects its revenue to come between $12.5 billion and $13.5 billion, while its non-GAAP earnings per share is expected to be $0.10.

Shares of INTC have gained 12.8% in the past month and 6.5% over the past year to close the last trading session at $34.87. However, the stock has plunged 30.6% year-to-date.

Let’s look at factors that could influence INTC’s performance in the upcoming months.

Mixed Financials

For the first quarter of 2024 (ended March 30), INTC’s net revenue increased 8.6% year-over-year to $12.72 billion, primarily driven by growth in its personal computing, data center, and AI business. Intel’s Data Center and AI (DCAI) division, which offers server chips, saw sales uptick 5% to $3.04 billion.

The company reported a non-GAAP operating income of $723 million, compared to an operating loss of $294 million in the prior year’s quarter. Further, its non-GAAP net income and non-GAAP earnings per share came in at $759 million and $0.18 versus a net loss and loss per share of $169 million and $0.04, respectively, in the same quarter last year.

However, its cash outflow from operating activities for the quarter amounted to $1.22 billion, while its adjusted free cash flow was negative $6.18 billion. As of March 30, 2024, its cash and cash equivalents decreased to $6.92 billion from $7.08 billion recorded as of December 31, 2023.

Mixed Analyst Expectations

Analysts expect INTC’s revenue for the third quarter (ending September 2024) to increase 2% year-over-year to $14.44 billion. However, the consensus EPS estimate of $0.32 for the same period indicates a 22.5% year-over-year decline.

For the fiscal year ending December 2024, Street expects INTC’s revenue and EPS to grow 3% and 4.6% from the prior year to $55.87 billion and $1.10, respectively. In addition, the company’s revenue and EPS for the fiscal year 2025 are expected to increase 12.1% and 78.9% year-over-year to $62.64 billion and $1.98, respectively.

Discounted Valuation

In terms of forward non-GAAP PEG, INTC is trading at 0.66x, which is 67.3% lower than the industry average of 2.01x. Similarly, the stock’s forward EV/EBITDA and Price/Sales multiples of 12.35 and 2.66 are 16.7% and 8.2% lower than the respective industry averages of 14.83x and 2.89x. Additionally, the stock’s 13.27x forward Price/Cash Flow is 43.4% below the industry average of 23.43x.

Weak Profitability

INTC’s trailing-12-month gross profit margin of 41.49% is 15.5% lower than the industry average of 49.09%. Likewise, its trailing-12-month EBIT margin and ROTC of 1.29% and 0.28% are below their industry averages of 5% and 2.78%, respectively. In addition, the stock’s 3.99% trailing-12-month ROCE is 6.9% lower than the 4.28% industry average.

POWR Ratings Exhibit Mixed Prospects

INTC’s stance is apparent in its POWR Ratings. The stock has an overall rating of C, which translates to Neutral in our proprietary rating system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. INTC has a B grade in Value, which is in sync with its lower-than-industry valuation.

However, it earned a grade of C for Sentiment, consistent with its mixed analysts’ estimates. The stock’s C grade for Momentum is justified by its share price, which is currently trading above its 50-day moving average of $31.03 but below the 200-day moving average of $38.89.

INTC is ranked #74 out of 92 stocks in the Semiconductor & Wireless Chip industry. Click here to access INTC’s Growth, Momentum, Stability, and Quality ratings.

Bottom Line

The company had strong top and bottom-line growth in the first quarter of 2024, particularly in crucial segments such as personal computing, data center, and AI. Despite these positives, ongoing operational challenges include significant cash outflows and reduced cash reserves.

As we anticipate its second-quarter results, analysts foresee a potential decrease in earnings per share alongside modest revenue growth. This cautious outlook reflects INTC’s ongoing efforts to navigate competitive pressures and strategic shifts within the semiconductor industry.

Considering INTC’s mixed analyst estimates, weak profitability metrics, and enhanced volatility (24-month beta of 1.39), it could be wise to wait for the better entry point in this stock now.

How Does Intel Corporation (INTC) Stack Up Against Its Peers?

While INTC has an overall grade of C, equating to a Neutral rating, you may also check out these A (Strong Buy) and B (Buy) rated stocks within the Semiconductor & Wireless Chip industry: ChipMOS TECHNOLOGIES INC. (IMOS - Get Rating), Tower Semiconductor Ltd. (TSEM - Get Rating), and Photronics, Inc. (PLAB - Get Rating). To explore more A and B-rated Semiconductor & Wireless Chip stocks, click here.

What To Do Next?

Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:

10 Stocks to SELL NOW! >

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


INTC shares were trading at $33.35 per share on Thursday afternoon, down $1.52 (-4.36%). Year-to-date, INTC has declined -33.17%, versus a 17.71% rise in the benchmark S&P 500 index during the same period.


About the Author: Shweta Kumari


Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
INTCGet RatingGet RatingGet Rating
IMOSGet RatingGet RatingGet Rating
TSEMGet RatingGet RatingGet Rating
PLABGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Trump or the Fed More Important to Stock Investors?

The S&P 500 (SPY) is flirting with new highs once again. But it is not very clear what is driving these stock price gains. That is why Steve Reitmeister shares his latest views including a market outlook, trading plan and top picks to stay on the right side of the action.

3 Dividend Growth Stocks for Long-Term Wealth

Dividend-growth stocks offer steady income and long-term value. With the Fed holding rates and inflation expected to ease, now is an opportune time to invest in companies like AbbVie (ABBV), Energy Transfer (ET), and Cheniere Energy (CQP) that consistently raise payouts. Read more…

3 Sub-$10 Tech Stocks with Multibagger Potential

The tech market is booming, fueled by AI, cloud computing, and digital transformation. With next-gen software, automation, and 5G driving growth, investors have massive opportunities. For those seeking high potential without the hefty price tag, sub-$10 stocks like Yext, Inc. (YEXT), Eventbrite (EB), and inTEST Corp. (INTT) could be your next big win. Read more...

Viavi Solutions vs. Lumentum Holdings: Which Optical Tech Stock Shines Brighter?

The optical tech industry is well-positioned for growth due to technological advancements and increasing demand for seamless connectivity. So, let’s analyze optical tech stocks, Viavi Solutions (VIAV) and Lumentum Holdings (LITE), to determine which optical tech stock shines brighter. Read on...

Investors in “Wait and See” Mode

Have you noticed that the S&P 500 (SPY) has been trading in a tight trading range of only 6,000 to 6,100 the past few weeks? Steve Reitmeister shares why this is happening along with a game plan for being on the right side of the market action. Read on for the full story...

Read More Stories

More Intel Corporation (INTC) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All INTC News