Intel (NASDAQ: INTC) is scheduled to announce Q2 earnings results on Thursday, July 22nd, after market close.
Factors Likely to Have Influenced Q2 Results:
Coronavirus-induced work-from-home and online-learning waves may have bolstered sales of processors utilized in enterprise laptops and data center servers. This, in turn, is anticipated to get reflected in second-quarter revenues. Although PC shipments have shown signs of slowing in the second quarter, strong demand for notebooks is likely to have contributed to Intel’s Client Computing Group segment revenues. Per IDC data, PC shipments in the second quarter of 2021 improved 13.2% year over year to 83.6 million units. Robust adoption of Xeon processors, which are integrated with Optane DC Persistent Memory solution, may have contributed to the top line in the quarter to be reported. Intel’s Optane DC Persistent Memory modules are being leveraged by the likes of Oracle ORCL, SAP, Google, Microsoft MSFT, Baidu, and Alibaba. Likewise, incremental adoption of Core vPro (11th generation) and Lakefield processors, and Tiger Lake series offerings, is likely to get reflected in the to-be-reported quarter’s revenues. The launch of third-generation Xeon Ice Lake processors is also expected to have benefited top-line growth for this Zacks Rank #2 (Buy).
Intel’s top line is expected to benefit from an improving data center business in the to-be-reported quarter.
Mobileye’s new design wins and increasing proliferation of IoT, along with the stabilizing automotive industry, may have contributed to Intel’s second-quarter performance. The growing clout of Mobileye’s SuperVision surrounds-view advanced driver-assistance system in premium electric vehicles bodes well. Growing adoption of cloud-based solutions across mobile computing, along with network infrastructure for 5G, triggered by momentum in coronavirus crisis-induced work-from-home wave, has been a key catalyst for growth. Intel’s collaboration with the Google cloud is noteworthy in this regard. Nonetheless, sluggishness across Intel’s Internet of Things Group (IOTG) end markets, especially retail and industrial, is likely to have affected revenues in the quarter under review.
- The consensus EPS Estimate is $1.07 (-13.0% Y/Y) and the consensus Revenue Estimate is $17.8B (-9.6% Y/Y).
- Given the macro environment, the company is set to deliver a strong PC quarter. All eyes will be on the data center segment. Datacenter revenue is estimated to be $5.94B, which is expected to return to sequential growth.
Intel Long (Buy)
Enter at: 56.62