Intel (INTC) reported second-quarter financial results that exceeded both internal forecasts and Wall Street expectations. The chip giant raised its guidance for full-year 2021.
Adjusted revenue of $18.5 billion rose 2% year-over-year and surpassed internal guidance by $700 million while beating consensus estimates of $17.8 billion. Intel’s Mobileye unit grew the fastest in the quarter, recording a 124% year-over-year increase in sales to $327 million. Toyota (TM) signed Mobileye to help it build advanced driver assistance systems.
Adjusted EPS came in at $1.28, exceeding internal guidance by $0.23 and beating consensus estimate of $1.06. Intel generated $8.7 billion in cash from operations and paid out $1.4 billion in dividends in Q2.
“Our second-quarter results show that our momentum is building, our execution is improving, and customers continue to choose us for leadership products,” said Intel CEO Pat Gelsinger.
Intel anticipates adjusted revenue of $18.2 billion and adjusted EPS of $1.10 in Q3. It raised its full-year 2021 adjusted revenue outlook to $73.5 billion from $72.5 billion previously. Adjusted EPS guidance for the year was lifted to $4.80 from $4.60 per share. The company estimates up to $20 billion in capital expenditure for the year. (See Intel stock charts on TipRanks).
Ahead of the earnings report, Bank of America Securities analyst Vivek Arya reiterated a Sell rating on Intel stock with a price target of $62. Arya’s price target suggests 10.79% upside potential. Although the analyst expected Intel to deliver strong Q2 results, he cautioned the outlook would be weak.
“While many argue that INTC is a cheap stock, we note valuation is not actually that cheap,” commented Arya.
Consensus among analysts is a Hold based on 8 Buys, 8 Holds, and 8 Sells. The average Intel price target of $60.05 implies 7.3% upside potential to current levels.
INTC scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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