On January 24, the chip giant Intel (NASDAQ: INTC) reported on its fourth quarter 2018 financial results and issued a first guide to 2019. I'll give in immediately – Intel's results were not particularly impressive. Full year 2018 revenue was $ 70.8 billion, down $ 400 million from the company's own projections, as third quarter results were reported on October 25, 2018 – despite sales down 13% % above the level of 2017. The company also released new forecasts for the full year 2019 of $ 71.5 billion – slightly more than in 2018.
In 2018, Intel's earnings per share (non-GAAP) reached $ 4.58 Dollar This is a huge improvement of 32% from the 201
Let's take a closer look at what has determined the results and guidance.
Intel had an iPhone problem
Intel is a provider of cellular modems for Apple (NASDAQ: AAPL) and is the exclusive provider of modems for Apple's freshest products: the iPhone XR, iPhone XS and iPhone XS Max. A key factor for Intel's Miss compared to expectations stemming from the weakness in fashion sales. It is no secret that the demand for the iPhone is disappointing. This confirmed Apple when it issued a sales warning on January 2. Intel said that fourth-quarter fashion sales were about $ 200 million below expectations, which is about half of the $ 400 million total failure.
Although the modem business was not sufficient compared to the forecasts, it is still worth noting that the company's revenue for the company was still up 68% compared to the same quarter last year, as Intel had not done so by one of Apple's two fashion retailers Flagship iPhones to the sole seller.
Data Center Miss Done The Rest
Back in October, Intel told investors that Data Center Group (DCG) sales would total $ 6.3 billion in the fourth quarter of 2018. The company missed that forecast and achieved sales of only $ 6.1 billion – $ 200 million below expectations. This is responsible for the remainder of the full year 2018 loss of revenue.
The company made lower-than-expected DCG sales on "weaker demand for China and a slowdown in the cloud."
Cloud service provider revenues are up 24% year-on-year, communications services revenues up 12%, and corporate and government revenue, which started weakly during the year, but over 2018 was strengthened, go back 5%.
In the 2019 Guidance Miss
analysts had expected Intel to generate revenue of $ 73.25 billion in 2019 and a profit of $ 4.55. Unfortunately, sales expectations turned out to be over optimistic at nearly $ 2 billion, even though the company is forecasting EPS of $ 4.60, which is slightly above consensus.
In his results presentation, Intel gave a comparison between his assessment of 2019 back in October and what he thinks now. While the company's capital expenditures (CapEx), tax rate and gross margin expectations are "approximately in line with October's [Intel’s] estimate," its operating margin estimate has deteriorated from roughly flat to less than one percentage point compared to 2018. [19659003FallsSiesichfragtenleiteteIntelfürdasJahr2019einenCapEx-Betragvon155MilliardenUSdollars(gegenüber152MilliardenUS-DollarimJahr2018)ErerklärtedassseineInvestitioneninBezugaufdieHerstellungvonLogikchips(denkenSieanMikroprozessoren)"somewhathigher"undderSpeicherCapExwäre"slightlylower"
Regarding the income declared Intel that "trade and [macroeconomic] are worrying" (19459023). Large cloud service providers that bought Intel processors at a vigorous pace over the course of 2018 are "absorbing capacity," and the company said prices for NAND flash are "worsening". (This impacts on the company's nonvolatile storage solutions revenue and profitability, or NSG for short.)
A potential record year, but not much growth
If Intel actually meets its forecast for 2019, then If this is the case, technically, it will be able to report another record-breaking year. However, sales growth of just under 1% is not impressive, and the company's planned EPS growth of less than half a percent is less inspiring. Growth-oriented tech investors should look elsewhere for the time being, as Intel's growth forecasts for 2019 are simply unconvincing.
Ashraf Eassa has no position in any of these stocks. The Motley Fool owns shares of Apple and recommends Apple. The Motley Fool has the following options: long January 2020 calls of $ 150 at Apple and short January 2020 – $ 155 calls to Apple. The Motley Fool has a disclosure policy.