Thursday proved to be an ugly day of trading for Intel (INTC), as a dismal fourth quarter earnings report put a drag on the entire market. The technology and software innovator issued a number of figures that gave market watchers pause, leading to a six percent drop in share price, the worst on the Dow Jones index.
Overall, fourth quarter profit for Intel fell a precipitous twenty-seven percent. This was largely based on two factors: a slowdown in the number of orders placed for the company’s software by PC manufacturers and a delay by the firm in entering the Smartphone market.
Intel was banking on the introduction of Microsoft’s (MSFT) Windows 8 software being a success. However, after the interface failed to sell as well as expected, Microsoft was naturally forced to halt orders on Intel’s microprocessors that run the system. Some industry observers believe this is a natural byproduct of the shift in consumer sentiment away from PC’s and towards tablets, as Intel’s PC related revenue fell overall by about six percent. Because of this the company is urging manufacturers to roll out a laptop-tablet hybrid product that can serve both functions, however this is yet to hit the markets.
The second major factor in Intel’s sluggish earnings is its failure to adapt to the smartphone market. As these devices and their software become increasingly relevant to the tech world, many analysts do not see Intel’s more expensive software systems as easily adapting to the very competitive smartphone market.
Business Section: Investment Ideas
What does this mean for Intel’s business and is it in for a prolonged bearish period? While poor profits certainly factored into the company's share price dropping, another factor was the announcement of their plans for 2013, which involve significant and higher spending. The overall full year growth estimates for Intel are in the single digits. We have assembled a list of the company and their competitors to help you start your research.
1. Intel Corporation (INTC, Earnings, Analysts, Financials): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap at $105.74B, most recent closing price at $21.25.
The firm posted the worst day of trading of any company on the Dow Jones on Thursday, with its share price falling six percent.
2. Microsoft Corporation (MSFT, Earnings, Analysts, Financials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $229.35B, most recent closing price at $27.25.
Analysts foresee a decline in profits for the company when it releases its earnings next week.
3. Advanced Micro Devices, Inc. (AMD, Earnings, Analysts, Financials): Operates as a semiconductor company in the United States, Japan, China, and Europe. Market cap at $1.75B, most recent closing price at $2.46.
The company has recently been embroiled in a high profile conflict with former employees over stolen documents.
4. Texas Instruments Inc. (TXN, Earnings, Analysts, Financials): Engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. Market cap at $37.57B, most recent closing price at $33.52.
Industry analysts expect lower profits for the company when it releases earnings next week.
5. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $470.35B, most recent closing price at $500.0.
The firm recently reduced input orders for its iPhone 5 after sales have come in lower than expected.
6. Hewlett-Packard Company (HPQ, Earnings, Analysts, Financials): Offers various products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Market cap at $33.33B, most recent closing price at $17.11.
Although some expect the company to experience a kind of rejuvenation in 2013, the share price is unlike to go above $20.
(List compiled by Dan Connelly)
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Intel Corporation (INTC, Chart, Download SEC Filings)
- Microsoft Corporation (MSFT, Chart, Download SEC Filings)
- Advanced Micro Devices, Inc. (AMD, Chart, Download SEC Filings)
- Texas Instruments Inc. (TXN, Chart, Download SEC Filings)
- Apple Inc. (AAPL, Chart, Download SEC Filings)
- Hewlett-Packard Company (HPQ, Chart, Download SEC Filings)
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