Intel Shares Down 7% On Revenue Miss, Weak Outlook

(RTTNews) - Intel Corp. (INTC), the world's biggest chipmaker, Thursday posted a profit for the fourth quarter that also trumped Wall Street estimates, as revenues grew 9 percent. However, the company's shares slipped 7 percent after revenues fell short of expectations as well as on a weak outlook.

Santa Clara, California-based Intel reported fourth-quarter profit of $5.20 billion or $1.12 per share, compared to a loss of $687 million or $0.15 per share last year.

Adjusted earnings for the quarter were $1.28 per share, up from $1.08 per share. On average, 31 analysts polled by Thomson Reuters estimated earnings of $1.22 per share for the quarter.

Intel's revenues for the quarter rose 9 percent to $18.66 billion from $17.05 billion last year. Analysts had a consensus revenue estimate of $19.01 billion for the quarter.

In the fourth quarter, Intel achieved revenue growth in nearly every business segment, and in 2018 every segment of the business set new annual all-time revenue records, the company said in a statement.

Data center group revenues grew 9 percent to $6.1 billion, while internet of things group dropped 7 percent to $816 million. Non-volatile memory solutions group increased to $1.1 billion from $889 million last year, and programmable solutions group grew to $612 million from $568 million. Client Computing group revenue was up 10 percent to $9.8 billion.

Intel, popular for its chips for computers, now focuses to transition away from being a computer-based company to a company that "powers the cloud and billions of connected computing devices."

Intel sees data center and Internet of Things (IoT) businesses as its primary growth engines, which now contributed a significant chunk of revenues and operating profit, helping it mask negative effects from the PC segment.

CFO Bob Swan said, "In the fourth quarter, we grew revenue, expanded earnings and previewed new 10nm-based products that position Intel to compete and win going forward. Looking ahead, we are forecasting another record year and raising the dividend based on our view that the explosive growth of data will drive continued demand for Intel products."

Looking forward to the first quarter, Intel expects revenues of about $16 billion and adjusted earnings of around $0.87 per share. Analysts currently estimate earnings of $1.01 per share and revenues of $17.37 billion.

For the full year 2019, Intel expects revenues of about $71.5 billion and adjusted earnings of about $4.60 per share. Analysts currently estimate earnings of $4.55 per share on revenues $73.25 billion.

INTC closed Thursday's trading at $49.76, up $1.82 or 3.80%, on the Nasdaq. The stock, however, slipped $3.50 or 7.03% in the after-hours trade.