Intel Corp. ( INTC ) is set to
report fourth quarter 2012 results on January 17. Last quarter it
posted a +20% positive surprise. Let's see how things are shaping
up for this announcement.
Growth Factors this Past Quarter
Intel primarily sells chips, which are used in notebooks,
netbooks and desktop computers. The transition to tablets and
mobile devices has led to lower PC sales, impacting the company's
results through 2012. The slow demand for PCs also impacted
pricing, leading to weaker margins.
Despite the launch of Windows 8, PC sales fell 4.3% in the
fourth quarter according to a very recent report from Gartner. The
research firm attributed the decline to tablet cannibalization. We
believe that the effect of weak PC demand on Intel sales will
likely be long-lived.
However, with the changing dynamics, Intel is focusing on
producing chips for mobile Internet applications, which we believe
will account for most of Intel's growth in the coming years. Also,
the company's focus on its fourth-generation core processors and
the new processors which will be incorporated into the refreshed
versions of Apple's ( AAPL ) MacBook Pro and
MacBook Air, might bringa sigh of relief in the latter half of the
year.
Earnings Whispers?
Our proven model does not conclusively show that Intel is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive Earnings ESP and a Zacks Rank of #1, #2 or #3
for this to happen. That is not the case here as you will see
below.
Negative Zacks ESP: The Most Accurate estimate
stands at $0.44 while the Zacks Consensus Estimate is higher at
$0.45. That is a difference of -2.22%.
Zacks Rank #3 (Hold): Intel's Zacks Rank #3
(Hold) lowers the predictive power of ESP because the Zacks Rank #3
when combined with a negative ESP makes surprise prediction
difficult. We caution against stocks with Zacks Ranks #4 and #5
(Sell rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post an
earnings beat this quarter:
- STMicroelectronics NV ( STM ), Earnings ESP of
25.0% and Zacks Rank #3 (Hold)
- Amtec Systems ( ASYS ), Earnings ESP
of 14.7% and Zacks Rank #3 (Hold)
About Earnings ESP
Would you like to own more stocks likely to beat their next
earnings report? And avoid stocks likely to disappoint?
If yes, then it's time you learn about the Earnings ESP score
available on Zacks.com.
APPLE INC (AAPL): Free Stock Analysis ReportAMTEC SYSTEMS (ASYS): Free Stock Analysis
ReportINTEL CORP (INTC): Free Stock Analysis ReportSTMICROELECTRON (STM): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment
Research