Published on 21 Jan 2024 on Zacks via Yahoo Finance
Will Top-Line Expansion Augment Intel's (INTC) Q4 Earnings?
Intel Corporation INTC is scheduled to report fourth-quarter 2023 results on Jan 25 after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 95.24%. It pulled off a trailing four-quarter earnings surprise of 136.31%, on average.The Santa Clara, CA-based semiconductor company is likely to report higher revenues year over year, driven by healthy demand trends in Data Center and AI Group. The introduction of cutting-edge AI-based products is also likely to boost revenues from the Client Computing Group.
Factors at Play
In the fourth quarter, Intel launched AI chips for data centers and PCs. This marks one of the largest architectural shifts for the company in 40 years. The strategic decision is primarily aimed at gaining a firmer footing in the expansive AI sector, spanning cloud and enterprise servers to networks, volume clients and ubiquitous edge environments, in tune with the evolving market dynamics.The company introduced the 5th Gen Intel Xeon processor family that delivers a 21% average performance gain for general compute, along with a 36% higher average performance per watt across a range of customer workloads. With built-in AI acceleration, optimized software and enhanced telemetry capabilities, the 5th Gen Xeon mainstream data center processor enables more manageable and efficient deployments of demanding network and edge workloads across diverse use cases. This is likely to get reflected in the upcoming results.In the quarter-under-review, Databricks opted to utilize Intel’s performance optimization application Granulate to enhance its Data Intelligence Platform. This will provide greater scalability to Databricks customers and enable them to securely optimize large-scale Databricks workloads while minimizing cloud infrastructure expenses and R&D efforts. Remark Holdings, Inc., a leading provider of AI-based video analytics, leveraged Intel-powered AI servers for its sales and marketing initiatives. These are likely to have generated incremental revenues in the fourth quarter.For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $15,140 million, which indicates an increase from the year-ago quarter’s reported figure of $14,042 million. The consensus estimate for adjusted earnings per share stands at 44 cents, suggesting strong growth from 10 cents reported in the prior year.