Intel (INTC) Beats The Odds To Achieve Positive Growth In Q1

Intel Corporation (NASDAQ:INTC) has announced its 2018 Q1 earnings and performance figures revealing impressive growth that has, in turn, boosted investor confidence.

The Q1 results were unveiled during the company’s earnings conference call which was held on April 26, 2018. The chipmaker revealed that it managed to achieve impressive revenue growth courtesy of its data center business. Its PC business also grew by 3 percent compared to its performance in the previous year despite facing heavy competition the rest of the computer industry and also the mobile industry.

Intel’s Q1 revenue came in at $16.1 billion marking a 9 percent bump from Q1 of the previous year and it also managed to surpass analysts’ estimate of $15.05 billion. The firm’s earnings per share (EPA) was $0.87 compared to the estimated figure of$0.72expected by analysts. It also marked a 32 percent increase compared to the EPA figure that was reported in Q1 of 2017.

The Q1 results had been highly anticipated as analysts were eager to see how things would go especially after Intel was rocked by concerns about how the recently discovered processor vulnerabilities would affect its performance. Additionally, there have also been reports that Apple Inc. (NASDAQ: AAPL) which is one of Intel’s biggest chip customers has been working on developing its own microprocessors for MacBooks. If the rumors are true, then losing Apple as one of it’s the chip customers would be a huge loss for Intel and it would significantly affect profits.

Future plans and performance expectations

Intel CEO Brian Krzanich stated that he was confident in the firm’s strategy which is backed by its strong business as well as data growth and strong demand for computing performance. The company also revealed that it plans to start improving its manufacturing plant for the 14-nanometer node sometime later this year. It also revealed that it plans to step into high gear production of the 10 nanometer node in the coming year.

William Stein, an analyst at Robinson Humphrey stated that the consensus anticipated strong results but the announced results were nothing short of impressive. However, the strong growth that Intel reported in Q1 of 2018 has raised questions as to whether it will maintain its current momentum amid the growing competition and uncertainties in the market.

Stein changed his price estimate for Intel from $50 to $57 after the announcement of the Q1 results. But not all analysts are convinced that the company will continue to experience positive growth. Stacy Rasgon, an analyst at Bernstein still maintains her bullish outlook on the company’s stock. Analysts like Rasgon argue that it will become increasingly difficult for Intel to maintain the positive growth especially now that the markets are growing even more competitive and also amid rumors about Apple’s plans for its own microprocessors.

Investors are also growing more concerned about the company’s ability to ramp up production of the 10-nanometer chip. Intel CEO Brian Krzanich stated during the earnings call that the rate of improvement has not been as high as expected.