Moscow, January 25 — “Lead. Economy”
Intel reported for the last quarter and the year 2018. At the same time it issued a forecast of revenue and profit for the current quarter. The numbers given by the manufacturer in the report and the forecast came in below analysts ‘ estimates. The reason industry observers called the slowdown in China and weakening demand for server processors Intel and the Intel modems.
Last quarter of the year ended for the Intel with revenues of $18.7 billion, which is 9% higher than a year ago. Gross margin fell 3 percentage points to 60.2%. Operating profit rose 15% to $6.2 billion, and net income amounted to $5.2 billion a Year earlier, was recorded a loss of $0.7 billion, but this was due to a one-time payment in connection with changes in tax legislation.
If you talk about the end of the year, Intel generated $70.8 bln, which is 13% more than in 2017. Gross margin declined from 62.3% to 61.7%. Operating profit grew 29%, to $23.3 billion, and net income — at $9.6 to $21.1 billion
However, Intel’s forecast for the current quarter increased fears of slower growth in the industry after the beginning of this month similar signals, indicating the stagnant demand for smartphones and the cooling of China’s economy, could be seen in the Apple, Samsung Electronics and TSMC. The company’s shares have fallen by 6.7%.
Intel has admitted that its performance deteriorated because of lower demand in China — the economy began to slow down its rapid development. This has affected the demand for desktop and mobile computers (to a lesser extent) and stronger ― at the demand of the processors for data centers and cloud systems. In particular, the Chinese data center operators and cloud services, as well as collectors such decisions, were filled components and reduced in the fourth quarter, purchases of new.
The local server market in recent years has been the engine of growth, because cloud services have become increasingly popular amid decreasing PC sales. Also in China showed a decline in demand for premium class smartphones, where the Apple products. As you know, Intel supplies Apple cellular modems for smartphones. Consequently, Intel has put its main client modems is less than expected.
Finally, in the fourth quarter accelerated decline in contract prices for flash memory, which Intel has started to produce significant volumes since last year, after the completion of the modernization of the plant in Chinese Dalian. All these negative factors, together and separately, exacerbated by a trade war between the US and China. One into another, but all together, hurting the economies of both countries.
The representative of Intel has tried to smooth over the situation, explaining that sales in China fell as some buyers — especially system suppliers for cloud computing — last year bought the processor earlier than usual, due to concerns about trade tensions between the US and China. The overall prospects for the industry in Intel believe “as vivid as before.” Intel expects the resumption of demand from data centers in the second half of this year.
From the Intel report, it became known that revenue in the Intel Client Computing Group, responsible for the supply of chips for personal computers in the fourth quarter of 2018 grew by 9% yoy and reached $of 9.82 billion, while analysts predicted a result of $10,01 billion
Division Data Center Group, in which the company makes server products and solutions for data centers, registered an increase of 21% from year to year, and revenue of $6,07 billion, failing to assess wall street’s $6.35-billion
Responsible for projects in the field of the Internet of things Intel has completed the last three months of 2018 with revenues of $816 million, which is 7% less than the value a year ago. Business in the field of memory, showed revenue growth of 25%, to $1.1 billion
Intel expects adjusted earnings per share in the first quarter of 2019 at $0.87 per share, and revenue of $16 billion, which was below analyst expectations for $1 per share and $of 17.29 billion, respectively.
Among the possible risks that can influence the results of Intel indicates adverse social, political and economic conditions in the countries where they operate Intel, its customers or suppliers, as well as sanctions, currency fluctuations and a British exit from the European Union.
Analysts at Barclays Capital recommends to sell the stock Intel. The Bank expects during the year the company’s securities will be reduced by 19.6%, to $40. Ahead, Intel expects a costly battle for market share amid intensifying competition from AMD and a slowing of demand from end markets, consider in Barclays Capital.
The consensus Refinitiv advises people to keep paper Intel, expecting that in the next 12 months they went up by 8.84% to $54,16 apiece.
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