After a rise of 43% in 2014, will we see more gains for the microprocessor leader
Intel will be releasing their earnings for last year’s final quarter after the market closes today and traders are keen to see if there is more room for growth in the stock price. Last year was a happy one for buyers, as it had it’s second best annual performance.
In a generally good year for markets, Intel followed suit despite being a company in transition. They have been suffering from the slowing PC market which is getting hit by the advancing smartphone and tablet shares, but over the last years they’ve managed to maintain their share and even take away some from the main competitor AMD in 2014.
In last year’s Q2 they had 94.7% of the entire PC processor market, 84% of desktop PC’s and 88% of laptops. All this is happening against the backdrop of PC shipments shedding 10.3% in 2013, but the industry surprised almost everyone by stabilising in 2014.
The connection with Microsoft will remain crucial this year, as the expected release of Windows 10 will prompt a surge in upgrades in the all-important PC market which still accounts for 60% of sales. Mobile, the painful subject for Intel who missed out on its global march, is still a losing business for them, but expectations are for an improved performance and a road map to profit.
Yesterday was also a curious day for the stock price, as there was a wide sell-off, but Intel gained 0.8%, reaching $36.77. However the company is trading at a 5-year top and with general nervousness dominating market participants, any results below expectations might trigger downward movement.
The company’s sales number is expected to make a 6.5% jump compared to last year, reaching $14.7 billion. This would be the highest ever number for the company, which also managed to surpass the 100 million mark for sold microprocessors in a single quarter.
The Consumer Electronics Show last week saw the company presenting new tech including a miniature super-low-power chip that is planned for wearable devices. Combined with their push to get in early on the IoT (Internet of Things) wave and the future rolling out of 14 and 10 nanometer process nodes, these are the hopeful drivers of future growth that Intel executives have been stressing on.
Today will be a case of either hitting or missing expectations (see our article on the subject) and a technical and fundamental review of the company. Has the bull-run already run its course, or is there more profit on the upside to be made, despite some technical indicators showing a likely downturn? The earnings report will have not only the numbers for the last quarter, but also the company’s future guidance. Any large deviation from what is expected might provide volatility. We’ll see today after the closing bell.
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Next article will be out tomorrow at 4:00pm GMT and will have our preview of next week’s market action, coupled with some great articles from the financial and tech world.