Why Intel Corporation (NASDAQ: INTC) stock is going gangbusters today

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Intel Corporation (NASDAQ: INTC) stock rose over 7.5% on 25th October, 2019 (as of 12:26 pm GMT-4; Source: Google finance) after the company posted better than expected results for the third quarter of FY 19. INTC in the third quarter of FY 19 has reported the adjusted earnings per share of $1.42, beating the analysts’ estimates for the adjusted earnings per share of $1.24, according to Zacks Consensus Estimate. The company had reported flat adjusted revenue to $19.19 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue by 6.43%.

For the third quarter, there is 5% fall in PC-centric revenue. Data Center Group had posted revenue growth of 4% to $6.4 billion from the prior year. Cloud revenue was up 3% in the third quarter year-over-year. Enterprise and government revenue grew 1% due to strong mix and better China demand and 11% rise in communication service providers revenue on the back of continued adoption and share gains of IA-based solutions.

Additionally, INTC has approved an increase of $20 billion in its stock repurchase program authorization. In the third quarter, the company had generated approximately $10.7 billion in cash from operations, paid dividends of $1.4 billion and used $4.5 billion to repurchase 92 million shares of stock.

The company is now well positioned for 5G deployments in 2020 and projects to grow the market segment share and wireless base stations to 40% by 2022. The company is prepared for the next market inflection as 5G enabled significant new IoT and edge growth opportunities that extend from in-network and on-premise edge equipment to smart connected endpoints. The company has increased the investment in 5G, though exiting 5G smartphone modem, and also has announced the sale of the IMFT fab to Micron. The company expects to close the deal in the fourth quarter, and will continue to take steps for the improvement of 3D NAND profitability, and reduced memory capex investments.

The company has increased the revenue outlook for 2019 by $1.5 billion to $71 billion. the company project revenue from the data-centric businesses to be flat to slightly up for the full year, and anticipate  PC-centric business to be flat to slightly down. The company expects non-GAAP EPS for the year to be $4.60. Operating margin for the year 2019 is expected to be approximately 32.5%. The company’s full year expectations for gross margin remains unchanged at approximately 60%. The company now expect fourth quarter gross margin to be down two to two-and-a-half points, sequentially, as the company continue to ramp 10-nanometer

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