Intel Earnings Look Great

Intel (NASDAQ: INTC) may enjoy a temporary end to the negative publicity. The company reported fourth-quarter results that beat consensus estimates. This sent the stock higher by 4.5% aftermarkets, on Jan. 25. It also means Intel shareholders may forget about the imminently negative impact on CPU sales related to the Meltdown and Spectre chip issue.

Intel earned $1.08 a share, beating consensus by $0.21. Revenue rose 4.3% to $17.1 billion. The chip giant raised its dividend a generous 10.1%, from $0.27 a share to $0.30 a share. Shareholders holding ITC stock on Feb 7 will get the payout on Mar 1.

Looking ahead, Intel forecast Q1 revenue of up to $15.5 billion, above the $15 billion consensus. EPS, though, will be in the range of $0.65 to $0.75 a share (consensus is $0.72). For the fiscal year 2018, revenue will exceed consensus, at $64 - $66 billion. EPS will handily beat the consensus of $3.26 a share. The company provided an EPS forecast range of $3.37 to $3.73 for the year. In 2017, Intel benefited from Data Center revenue growing 11% to 19.1 billion. Cost cuts of $5.4 billion in the quarter and $21.1 billion will lead to total costs down to 30% of revenue by 2020.

Takeaway

Intel does not view the security flaw as an issue that will hurt chip sales or raise costs. At a 16x P/E, Intel stock still has plenty of upside.