Intel Corp. (NASDAQ: INTC)
Intel Corp. Earnings
Yesterday after the close, Intel Corp. (INTC) announced earnings that beat analyst expectations but shares still fell in the post market session. The company announced earnings per share of 74 cents on $14.9 billion in revenues while analysts were expecting 63 cents per share on $14.8 billion in revenues. A researcher for Zacks Research suggest that shares may be selling off because, “we’ve seen Intel’s gross margins tick down quarter after quarter (-1.1 percent both annually and quarterly year over year) and there appear to be no signs of stopping: Intel’s Q1 guidance for gross margin is down to 58 percent from 64.3 percent in Q4 15.” (Zacks). Going forward we will need to keep an eye on margins to see if INTC can make some improvements. Currently analysts have an average price target of $36.42 but we may see some downgrades come out over the next couple days.
“Our results for the fourth quarter were consistent with expectations. We marked a strong finished to the year. Taken as a whole, 2015 demonstrated the benefits of our strategy, which is designed to capitalize on the growing need for the infrastructure powering the smart and connected world. That strategy is also resulting and the evolution of our business model to focus on three keys areas of growth, the Data Center, the Internet of Things and Memory. Our results reflect that evolution,” Brain Krzanich stated during their earnings conference call. (SeekingAlpha)
Shares of INTC are looking to gap down below the 200-day moving average currently sitting at $31.72 as a result of their earnings release. Currently shares are trading in the premarket session around $30.50 on above normal volume and if we open at this price that will be a drop of almost 7% from yesterdays closing price of $32.74. We should see some support come in around $30.56, $30.50 and $30.32 while resistance will be met at $31.43, $31.50 and at the 200-day moving average, $31.72. This looks like it could be an interesting play with the futures down nearly 2% as oil continues to slide. Would like to see a test of the 200-day area for a possible short position into resistance. I will definitely have this one on my radar today.
Looking at the bigger picture on the daily chart you can see that INTC has started to form a reverse head and shoulders chart pattern with the $35 price level being the base. We will have to wait and see where the stock heads over the next couple weeks but that should be something to keep an eye on. Over the past year shares have been stayed consistently in between the high $20s and low $30s range and now that we are opening below the 200-day moving average we may be heading back into the high $20s range.
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)