Intel Corporation (NASDAQ: INTC)
After the close on Tuesday, Intel Corp (INTC) reported earnings that beat analyst estimates but after releasing lower guidance share prices tumbled. They released earnings of 64 cents per share on $14.5 billion in revenue compared to the previous period last year of 66 cents per share on $14.55 billion in revenue. Analyst polled at Thomson Reuters estimated earnings at 59 cents per share on $14.22 billion in revenue. INTC released fourth quarter guidance of $14.8 billion in revenue that was short of analyst estimates of $14.83 billion. Earnings were impacted by the strong dollar and weak global economy but CEO Brian Krzanich still remains optimistic despite the challenges, stating:
“Despite ongoing macroeconomic headwinds, there are signs that the PC market is beginning to stabilize and we continue to benefit from a strategy designed to capitalize on the growing need for the infrastructure that powers the smart and connected world. We remain solidly on track to our previously committed goal to improve mobile profitability by $800 million. Over 75% of that goal has already been realized to-date. At the same time, our strategy to be a foundational supplier of internet infrastructure is delivering growth. Our Data Center, non-volatile memory and IOT groups all posted double digit growth year-over-year.” SeekingAlpha
Despite the headwinds that most companies are facing like stronger dollar and weak global economies, I still think this was a strong earnings release and the price action today is also agreeing. As long as INTC holds the 200 day I like it to the long side. Analyst currently have a price target of $33.58.
Initially, when INTC released earnings, shares bounced in the post market all the way to $33.08 before tumbling to after-market session lows of $31.20. Shares opened the day down at $31.39, down just over 2% from yesterday’s close, but staged a rally that lasted throughout the day. This is big because shares were able to regain the 200 day moving average on strong volume as buyers took control. Look for resistance at $32.50 and $34.75 while support should come in at the 200 day moving average currently sitting at $31.67. Fundamentals are mixed while technicals are looking bullish as of recently. The longer INTC maintains its price above the 200 day moving average the better the chance for further price movement to the upside so keep an eye on price action over the next few days. A break out over $32.60 could signal an entry point for the long side. Shares closed today at $32.80.
Looking over the long term on INTC’s daily chart you’ll see that shares are down on the year as they had a Death Cross back in March that was followed by a downward trend. They opened 2015 at $36.67 and as of the close of October 12th they finished at $32.21, a 12% difference YTD. Most of the year has been spent below the 200 day moving average, which is currently sitting at 31.7038, and just as of recently they finally made it back above. If you look closely at the daily chart you’ll notice a reverse head and shoulder pattern that bottomed out at $24.87 and confirmed the pattern as it moved up above $30.50 on October 5th. This is typically a bullish pattern as the shares move from a down trend to an uptrend so this is something you’ll want to watch closely going forward.
Intel Corp. designs, manufactures and sells computer components and related products. It also engages in the designing and manufacturing of computing and communication components, such as microprocessors, chipsets, motherboards, and wireless and wired connectivity products. The company develops advanced integrated digital technology products, primarily integrated circuits, for industries such as computing and communications. The company operates its business through following segments: PC Client Group, Data Center Group, Internet of Things Group, Mobile and Communications Group, Software & Services and All Other. The PC Client Group segment includes platforms designed for the notebook, desktop, and certain tablet market segments; and wireless and wired connectivity products. The Data Center Group segment offers products designed to provide leading energy-efficient performance for all server, network, and storage platforms. The Internet of Things Group segment offers platforms for customers to design products for the retail, transportation, industrial, and buildings and home market segments. The Mobile and Communications Group segment offers products that incorporate hardware, software, and connectivity for tablets, smart phones, and other mobile devices. The Software & Services Operating segment includes software products for endpoint security, network and content security, risk and compliance, and consumer and mobile security from its McAfee business; software optimized products for the embedded and mobile market segments; and software products and services that promote Intel architecture as the platform of choice for software development. The company was founded by Robert Norton Noyce and Gordon Earle Moore on July 18, 1968 and is headquartered in Santa Clara, CA. MarketWatch