Intel Corporation INTC is scheduled to report third-quarter 2024 earnings after the closing bell on Oct. 31. In the to-be-reported quarter, the company is likely to have recorded lower revenues from the Client Computing Group (CCG) segment as high customer inventory levels and a conservative approach toward placing orders for high-value items remain headwinds.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Factors at Play
CCG is the company’s largest segment and accounts for the lion’s share of total revenues. It includes computer CPUs, several server boards, form factor systems and graphic products.
During the quarter, Intel collaborated with Karma Automotive to develop a cutting-edge Software Defined Vehicle Architecture (SDVA) solution aimed at redefining the automotive industry by creating intelligent, efficient and sustainable vehicles. The partnership aims to focus on the development of SDVA, a significant departure from traditional vehicle architecture, which relies on multiple Electric Control Units (ECUs). By integrating various vehicle functions within Intel’s centralized and zonal compute systems, SDVA is expected to offer greater flexibility, lower costs, enhanced performance and improved energy efficiency.
In addition, Intel extended its collaboration with Amazon Web Services, Inc. (“AWS’”). The collaboration involves co-investment by the companies in custom chip designs under a multi-year, multi-billion-dollar framework. Under this expanded agreement, the semiconductor company will develop an AI fabric chip for AWS, leveraging its most advanced Intel 18A process node. Additionally, a custom Xeon 6 chip will be produced on Intel 3, strengthening its existing partnership in which Intel provides Xeon Scalable processors for AWS. These developments are likely to have supported the CCG segment’s top line during the quarter.
However, Intel has been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition is likely to limit the ability to attract and retain customers and affect operating and financial results.
Moreover, high raw material prices due to Middle East tensions, the prolonged Russia-Ukraine war and the consequent economic sanctions against the Putin regime have affected the operation schedules of various firms, affecting Intel’s demand schedule. High technological obsolescence of most products has further escalated operating costs.
Overall Expectations
The Zacks Consensus Estimate for CCG revenues is pegged at $7.34 billion, indicating a decline from $7.89 billion in the year-ago quarter. Our estimate for revenues from this segment is pegged at $7.56 billion, suggesting a 3.9% year-over-year decline.
For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $13.01 billion, which indicates a decrease from the year-ago quarter’s reported figure of $14.16 billion. The consensus estimate for loss per share is pegged at 3 cents, suggesting a decline from earnings of 41 cents reported in the prior year.
Earnings Whispers
Our proven model does not predict an earnings beat for Intel for the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Intel currently has an ESP of 0.00% with a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Arista Networks Inc. ANET is set to release quarterly numbers on Nov. 7. It has an Earnings ESP of +0.96% and carries a Zacks Rank #2.
The Earnings ESP for Altice USA, Inc. ATUS is +66.67% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Nov. 4.
The Earnings ESP for Qualcomm Incorporated QCOM is +0.48% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov. 6.
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