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Intel Corporation (INTC): Were Investors Too Optimistic On Guidance For 2015?

Intel Corporation (NASDAQ:INTC) had a very successful 2014 and to end it on a high note, the company had to report a last quarter earnings that will have beat the estimates. Intel Corporation (NASDAQ:INTC) did just that by reporting an impressive quarterly earnings report. But after such a report, why should Intel Corporation (NASDAQ:INTC) shares fall by around 1%? Sizemore Capital Management CIO, Charles Sizemore talked on CNBC about the reasons behind Intel Corporation (NASDAQ:INTC)’s stock drop on Thursday.

Intel Microprocessors

Sizemore said that after a very successful 2014 for Intel Corporation (NASDAQ:INTC), investors and shareholders expected a very optimistic 2015 guidance. But, the guidance set did not meet that expectations and the stock started falling. In the fourth quarter, Intel Corporation (NASDAQ:INTC) reported a year-over-year revenue increase of 6%, net income went up by 39% and earnings per share went up by around 45%.

In spite of this strong results in fourth quarter, Intel Corporation (NASDAQ:INTC) reported a 2015 first quarter revenue guidance of $13.7 billion, which is not only below the expectation of $13.77 billion and also below the fourth quarter revenue of $14.72 billion. Is this the major reason behind the dip on Thursday? Sizemore shared his opinion on Intel Corporation (NASDAQ:INTC)’s performance for 2014.

“Overall, I thought they had a fantastic year, I though in the quarter, their earnings were up by 45%. They are really doing well. Their data center business is doing well and their PC division is doing just fine. Overall globally PC sales have stabilized. They are still drifting a little bit lower. But I think that’s going to change here in the second half of this year,” Sizemore said.

He added that one major reason that PC sales might pick up again in 2015 is due to the fact that Windows 8/8.1 was not up to the mark, nobody liked them and the new Windows 10 launch might change that scenario and a lot of companies might go for upgrade to Windows 10, which might include a lot of corporates.

Intel Corporation (NASDAQ:INTC) has given a lot of subsidies in mobile communication sector to stay in competition and due to this, Intel Corporation (NASDAQ:INTC)’s operating loss has went up by around $5 billion for 2014. Sizemore said that Mobile was never into equation when Intel Corporation (NASDAQ:INTC) stock was priced. He added that mobile might be a success for Intel Corporation (NASDAQ:INTC) or it might not return them anything. But he feels that the mobile performance does not impact Intel Corporation (NASDAQ:INTC) stock negatively.

Disclosure: None

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