Intel is providing a clearer picture of the upcoming earnings season as they report a blow-out quarter and raise their guidance above street estimates. Shares are trading higher by 5% in the after hours market.
Intel reported 40 cents vs estimates for 30 cents. They also beat on the top line with revenues of $10.6B vs estimates of $10.17B. The company is also guiding revenues for Q1 to $9.7B – well above estimates of $9.35B. The best news of the report is that this isn’t just a margin story. Although margins blew out to 65% the company is also reporting strong top line growth.
As we said with Alcoa, this is just one report and investors would be unwise to place too much emphasis on this single report, however, we feel that Intel’s earnings provide a better idea of what to expect for the rest of earnings season. As our expectation ratio has long predicted, the environment of “better than expected” continues. We now await JP Morgan tomorrow AM.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.