Intel’s Q4 Financial Reveals Weaker Than Expected Quarter

Intel's Q4 Financial Reveals Weaker Than Expected Quarter

Intel’s Q4 Financial Reveals Weaker Than Expected Quarter

Intel’s share price has taken a hit of around 6% following the release of their Q4 2019 financial report, despite reporting growth across almost all sectors of the company. 

In Q4 Intel projected earnings of around $19 billion in revenue, though in reality the company only generated $18.7 billion in revenue, leaving a financial gap of $300 million. 

Intel blames this shortfall on lower NAND prices, weaker than expected modem demand from the smartphone market and a slow down in growth in the Chinese market. In Q1 2019, Intel expects their revenues to remain flat year-over-year, projecting $16 billion in revenue. In 2019 Intel expects to earn a total of $71.5 billion. 

Moving into Q1 2019, Intel expects a drop in operating margin of 1%, thanks to the costs of ramping their 10nm technology and several other factors.   

In 2019 every major business group within Intel earned more money, with the company’s data center group growing by 21% when compared to 2017. The company’s Non-Volatile Solutions Group also generated 22% more revenue than the previous year, thanks to high demand for NAND and the growing use of Optane memory. Lower NAND pricing made the growth of this business group lower than expected. 

  Q4 2018 Q4 2017 YoY Growth 2018 Revenue YoY Growth Client Computing Group $9.8 Billion $9.0 Billion Up 10% $37 Billion Up 9% Data Center Group $6.1 Billion $5.6 Billion Up 9% $23 Billion Up 21% Internet of Things Group $816 Million $879 Million Down 7% $3.5 Billion Up 9% Non Volatile Solutions Group $1.1 Billion $889 Million Up 25% $4.3 Billion Up 22% Programmable Solution Group $612 Million $568 Million Up 8% $2.1 Billion Up 12%

   

Intel's Q4 Financial Reveals Weaker Than Expected Quarter  

Intel Client Grout also saw growth of around 9% in 2018, thanks to growing demand for high-end components. The release of Intel’s Coffee Lake products has propelled this growth by delivering performance levels that were previously never seen in Intel’s client hardware. 

Intel's Q4 Financial Reveals Weaker Than Expected Quarter  

While Intel’s 2018 growth can be seen as nothing but outstanding, the company’s lower than expected Q4 and weak 2019 projections have caused many shareholders to lose faith in the company’s growth, prompting the company’s shares to lower in price. Regardless, Intel is expected to increase their 2019 revenues by $700 million over 2018, which is no small feat. The problem is that analyst expected more, and the company’s continued lack of a CEO has added an extra layer of uncertainty to proceedings. 

You can join the discussion on Intel’s Weaker than Expected Q4 on the OC3D Forums.