Last week, Intel reported its financial results for the fourth quarter of 2019. Notably, the firm’s revenue and profits exceeded forecasts of Wall Street analysts. Moreover, the company’s end of year earnings helped it achieve the highest annual sales in its history.
Besides, Intel offered projections regarding its financial performance in Q1 2020 that indicate its hot streak isn’t cooling off. However, the firm might experience a rockier second half this year due to increased competition.
Intel’s Q4 2019 Performance
In the period ending December 31, Intel generated $20.21 billion in sales and $6.9 billion, or $1.58 per share, in income. The chipmaker also ended 2019 with full-year grosses of $72 billion, a new record for the Santa Clara, California-based company. Analyst firm Refinitiv pegged the firm’s earnings at $19.23 billion in revenue and earnings of $1.25 per share.
Year-over-year, the manufacturer improved its financial performance from Q4 2018 by 8 percent. Following the announcement of its fourth-quarter earnings, the firm saw its stock price surge by 7 percent.
Notably, The Burn-In reported Intel had to outsource production on its PC chipsets to meet unexpectedly high demand last month. However, the corporation’s supply chain issues didn’t devastate the firm’s computer processor business. Indeed, that segment of the company made $10.2 billion, up 2 percent from last year.
That said, the company’s most impressive gains came from its server business. In Q4 2019, Intel’s datacenter chips business brought in $7.21 billion, a year-over-year increase of 19 percent.
Intel’s Near and Long-Term Outlook
In the near term, Intel has a very favorable financial outlook. When presenting its Q4 2019 results, the firm forecast continued growth in Q1 2020. The company expects revenue of $19 billion this quarter, an increase of 18 percent from last year. Moreover, the corporation predicts earnings of $1.23 per share, a rise of 48.1 percent from the same period in 2019.
Intel also projects revenue of $73.5 billion in the 2020 fiscal year and profits of $4.71 in the same frame. Conversely, Refinitiv estimates the chipmaker will generate $72.25 billion in FY 2020 with annual earnings of $4.68.
To reach its goals, Intel has to stabilize its supply chain and fend off its competitors. Notably, the firm’s PC chip market share is challenged by rivals with some impressive hardware. Similarly, the company’s datacenter dominance is being challenged by a Big Tech giant best known for its cloud and e-commerce business.
Even with those headwinds, there are reasons to believe Intel will have an excellent year. Last month, the corporation spent $2 billion to acquire Habana Labs. Consequently, the firm can utilize the startup’s artificial intelligence chip breakthroughs to bolster its overall market position.
Besides, the manufacturer had a very impressive showing at the 2020 Consumer Electronics Show. The company’s 10 nm++ Tiger Lake processors performed remarkable feats of video game rendering and image enhancement. Also, the company’s Horseshoe Bend foldable screen laptop prototype offered a glimpse at the next generation of personal computing.
Furthermore, the firm’s Mobileye self-driving tech startup showed off an autonomous vehicle operation kit capable of directing cars through dense city traffic.
Provided Intel brings those concepts to market this year, it’ll have no problem being the world’s best-selling chipmaker two years in a row.