Intel Corporation INTC is set to unveil its second-quarter 2024 financial results on August 1 after the market closes. The upcoming earnings report may highlight a surge in revenues from the Client Computing Group (CCG) compared to the previous year, propelled by a relentless focus on product innovation. Intel’s strides in enhancing semiconductor manufacturing efficiency and optimizing its supply chain are a boon to their business.
Dynamics in Action
CCG remains Intel’s primary revenue driver, constituting a significant portion of its overall revenue stream. This segment encompasses computer CPUs, various server boards, form factor systems, and graphic products.
In the last quarter, Intel made headlines by surpassing the milestone of 500 AI models tailored for the Intel Core Ultra processors. These models encompass a wide spectrum of AI applications, such as large language models, diffusion, super resolution, object detection, and computer vision. The adaptability of these AI applications across different processing units within the Ultra Core processors (CPU, GPU, and NPU) has notably enhanced Intel’s footprint in the nascent market of AI-powered PCs.
On the path to shipping over 40 million AI PC processors in 2024, Intel is expanding its AI presence to edge devices and PCs leveraging Core Ultra processors, with support for over 100 software vendors.
During the review period, Intel introduced the Lunar Lake architecture at Computex 2024. The Lunar Lake processors are poised to amplify the capabilities of Neural Processing Units, bringing substantial performance enhancements to AI-powered PCs. With advanced graphics and AI processing capabilities, the solution is projected to elevate device security, battery life, and operational efficiency. These innovations likely contributed to increased revenues within this segment.
Overall Projections
The anticipated revenue from the CCG segment, as per the Zacks Consensus Estimate, stands at $7.51 billion, signaling growth from $6.78 billion in the comparative period. Our revenue estimate for this segment stands at $7.43 billion, indicating a robust 9.7% year-over-year increase.
For the June quarter, analysts foresee a total revenue of $12.92 billion, marking a slight decline from the prior-year quarter’s figure of $12.95 billion. The consensus estimate for adjusted earnings per share is 10 cents, reflecting a decrease from the 13 cents reported in the corresponding period.
Insights on Earnings Speculations
Our evaluation model does not definitively forecast an earnings outperformance for Intel in the second quarter. The alignment of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) typically enhances the odds of an earnings surprise. However, this scenario does not apply here.
Earnings ESP: The Earnings ESP, representing the variance between the Most Accurate Estimate and the Zacks Consensus Estimate, currently stands at +10.79%. The Most Accurate Estimate rests at 11 cents, while the Zacks Consensus Estimate is 10 cents.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel currently holds a Zacks Rank #4 (Sell).
Stocks to Watch
Here are some noteworthy companies that could potentially deliver an earnings beat this season, based on our analysis:
Fortinet FTNT is gearing up for its earnings release on August 6, boasting an Earnings ESP of +3.41% alongside a Zacks Rank #3.
The Earnings ESP for BWX Technologies BWXT is +0.88%, complemented by a Zacks Rank #3. The company is slated to disclose its financial results on August 5.
Furthermore, Watts Water Technologies WTS exhibits an Earnings ESP of +1.17% and holds a Zacks Rank #3. Its quarterly numbers are scheduled for release on August 7.