Intel's stock jumps 7% on better-than-expected earnings and revenue

Key Points

  • Intel beat on the top and bottom lines.
  • The company's guidance was also strong, lifting the stock after hours. 

Intel CEO Robert "Bob" Swan announces the company's Tiger Lake chips at the technology fair CES.

Christoph Dernbach | picture alliance | Getty Images

Intel shares jumped 7% in extended trading on Thursday after the chipmaker reported better-than-expected fourth-quarter earnings, extending a rally that's pushed the stock to its highest since the dot-com bubble in 2000.

Here are the key numbers:

  • Earnings: Excluding certain items, $1.52 per share, vs. $1.25 per share as expected by analysts, according to Refinitiv.
  • Revenue: $20.21 billion, vs. $19.23 billion as expected by analysts, according to Refinitiv.

Intel's revenue rose 8% from a year earlier in the quarter, which ended on Dec. 28, the company said in a statement .

Intel's largest operating segment, the Client Computing Group that makes chips for PCs, laptops and tablets, posted $10.01 billion in revenue, up about 2% year over year and exceeding the $9.74 billion consensus estimate among analysts polled by FactSet.

Revenue from the company's Data Center Group, which makes chips for computer servers, was up about 19% at $7.21 billion, more than the $6.40 billion FactSet analyst consensus.

Intel's Non-Volatile Memory Solutions Group offering memory and storage products had $1.22 billion in revenue, below the $1.28 billion FactSet consensus.

The Internet of Things Group, which makes computing products for industries and embedded systems, fetched $1.16 billion in revenue. The FactSet consensus was $1.03 billion.

In the fourth quarter Intel announced the $2 billion acquisition of artificial intelligence chip company Habana Labs and completedthe sale of the majority of its smartphone modem business toApple. The company also told customers that PC chips were in short supply .

"We think that Intel's PC chip shortages likely resulted in some PC business being pushed from the December quarter into the March-2020 quarter, which we think could cause Intel's CCG revenue in the March quarter to be higher than usual, despite a sequential seasonal step down," Nomura Instinet analysts led by David Wong, who have a buy rating on Intel stock, wrote in a note to clients on Jan. 15.

Meanwhile, Intel has faced greater competition fromAMD, which has beat it to market with chips featuring small 7-nanometer transistors.

"It looks like INTC's 10nm server MPU [microprocessor unit] is at least one full year behind AMD, and we expect INTC to lose 2,000bps of server share to AMD over the next two years," Jefferies analysts led by Mark Lipacis, who rate Intel a hold, wrote in a note on Tuesday.

Intel is forecasting first-quarter earnings of $1.30 per share, excluding certain items, and revenue of $19 billion, implying 18% growth. Analysts polled by Refinitiv had expected $1.04 in earnings per share, excluding certain items, and $17.19 billion in revenue.

For Intel's 2020 fiscal year, the company expects $5 in earnings per share, excluding certain items, on $73.5 billion in revenue, which would be up 2%. The consensus estimates were $4.68 in earnings per share, excluding certain items, and $72.25 billion in revenue, according to Refinitiv.

As of Thursday's close, shares of Intel are up almost 6% since the beginning of 2020 and are at their highest levels since mid-2000.

Executives will discuss the results with analysts on a conference call at 5 p.m. Eastern time.

This is breaking news. Please check back for updates.

WATCH: Intel upgraded ahead of earnings

VIDEO 4:56 04:56

Intel upgraded ahead of earnings

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