Is Intel (INTC) Poised to Beat Earnings Estimates?


We expect semiconductor company Intel Corp. (INTC) to beat expectations when it reports first-quarter 2014 results on Apr 15.

Why a Likely Positive Surprise?

Our proven model shows that Intel is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +2.70%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank: Intel has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 and 3 have a significantly higher chance of beating the earnings estimates. The Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.  

The combination of Intel’s Zacks Rank #3 and an ESP of +2.70% makes us reasonably confident in looking for a positive earnings beat on Apr 15.

What is Driving the Better-than-Expected Earnings?

Intel’s new products, strong position in the emerging markets, solid execution and cost control measures are expected to generate a positive earnings surprise in the to-be-reported quarter.

Additionally, Intel’s focus on the mobile segment, adoption of new products, growth in data centers and new offerings should help drive growth. Also, the company has increased its focus on the wearbles market. Its recent acquisition of Basis Science can stimulate its growth in the wearables category. The positive trend is seen in the trailing four-quarter average surprise of 0.06%.

Other Stocks to Consider

Intel is not the only firm looking up this earnings season. We also expect earnings beats from the following companies:

E-Commerce China Dangdang Inc. (DANG), with Earnings ESP of +33.33% and a Zacks Rank #1 (Strong Buy).

ON Semiconductor Corp. (ONNN), with Earnings ESP of +6.67% and a Zacks Rank #1.

Yelp, Inc. (YELP), with Earnings ESP of +33.33% and a Zacks Rank #2 (Buy).

Read the Full Research Report on INTC
Read the Full Research Report on ONNN
Read the Full Research Report on YELP
Read the Full Research Report on DANG

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