INTC Beats Q4 Earnings Estimates Despite Y/Y Lower Revenues

Investing.com--US stock index futures rose Friday, boosted by healthy earnings from tech giant Apple ahead of the release of a closely-watched inflation report.

At 05:40 ET (10:40 GMT), Dow Jones Futures gained 165 points, or 0.4%, S&P 500 Futures climbed 26 points, or 0.4%, and Nasdaq 100 Futures rose 165 points, or 0.8%.

The main averages on Wall Street climbed in the prior session despite equities paring back some earlier gains following fresh tariff comments from US President Donald Trump. An upbeat outlook from electric vehicle giant Tesla (NASDAQ:TSLA) helped to offset software titan Microsoft (NASDAQ:MSFT)'s disappointing guidance for its all-important cloud computing unit.

Apple rises on strong Q1

The major quarterly corporate earnings season continues as the week comes to an end.

Apple (NASDAQ:AAPL) stock rose premarket after executives at the iPhone maker stated the group now expects sales to grow in the low- to mid-single digits in its fiscal second quarter. The guidance surpassed expectations and pointed to momentum in demand for the iPhone, Reuters reported, citing analysts.

The rosier outlook helped to assuage some worries around sales for Apple's flagship handset, which dropped marginally and missed estimates in its key holiday shopping quarter, due in part to the firm's new AI features not being available in some markets. Still, CEO Tim Cook said the enhancements, known as Apple Intelligence, are boosting sales.

Elsewhere, chip plays Intel (NASDAQ:INTC) and KLA Corporation (NASDAQ:KLAC) both rose on the back of stronger-than-forecast earnings, while Deckers Outdoor (NYSE:DECK) shares plunged 16% premarket as full-year revenue guidance came in below expectations.

PCE inflation data on tap; tariff fears deepen

Investors are keenly awaiting the release of the personal consumption expenditures (PCE) price index later in the session, the Federal Reserve’s preferred measure of inflation.

Economists predict a 0.3% month-over-month increase, indicating persistent inflationary pressures. This data will be pivotal in shaping expectations for the Fed’s monetary policy trajectory.

Earlier this week, the Fed maintained its benchmark interest rate and signaled a hawkish stance, emphasizing its commitment to curbing inflation.

Fed Chair Jerome Powell highlighted the strength of the labor market and ongoing price pressures, suggesting no immediate plans to cut rates.

Decent tariff announcements by President Donald Trump have introduced uncertainties, particularly concerning trade relations with key partners such as China, Canada, and Mexico.

Markets are still uncertain regarding his trade policies and their impacts. On Thursday, he stated that he would soon determine whether to exempt Canadian and Mexican oil imports from the 25% tariffs set to take effect on Saturday.

Crude on course for weekly loss

Oil prices slipped lower Friday, and were set for weekly losses as traders fretted over the prospect of trade tariffs under President Trump.

By 05:40 ET, the US crude futures (WTI) dropped 0.1% to $72.67 a barrel, while the Brent contract fell 0.2% to $75.75 a barrel.

For the week, Brent is set to fall 1.6% while WTI has declined 1.8%. However, for the month of January, Brent is set to gain around 3%, its best month since June, and WTI is poised to climb 2.1%.

(Ayushman Ojha contributed to this article.)

Investing.com-- Intel Corporation (NASDAQ:INTC) reported fourth-quarter earnings that surpassed analyst expectations but issued a weak outlook for the first quarter of 2025.

The chipmaker's shares rose more than 2% in premarket trading Friday.

Intel posted adjusted earnings per share (EPS) of $0.13, edging past the analyst estimate of $0.12. Revenue for the quarter came in at $14.26 billion, beating the consensus estimate of $13.83 billion but declining 7% YoY. For the full year 2024, Intel reported revenue of $53.1 billion, down 2% YoY.

Despite the earnings beat, Intel's guidance for the first quarter of 2025 fell short of expectations. The company forecasts revenue between $11.7 billion and $12.7 billion, below the analyst consensus of $12.86 billion. Intel also expects EPS to range from -$0.27 to $0.00, compared to the $0.09 analysts were anticipating.

Adjusted gross margins are projected to come in at 36%, below the 39% that analysts expected.

Michelle Johnston Holthaus, interim co-CEO of Intel and CEO of Intel Products, commented on the results: "The fourth quarter was a positive step forward as we delivered revenue, gross margin and EPS above our guidance. Our renewed focus on strengthening and simplifying our product portfolio, combined with continued progress on our process roadmap, is positioning us to better serve the needs of our customers."

The company attributed its weak Q1 outlook to seasonal weakness, macroeconomic uncertainties, ongoing inventory adjustments, and competitive pressures.

Intel's management emphasized their focus on cost reduction and improving efficiency to enhance profitability and shareholder value.

Commenting on the report, Barclays (LON:BARC) analysts said Intel's Q4 beat was "spoiled by yet another reset lower in Q1."

"The reset was largely expected from the top line but the structurally impaired margins from Lunar Lake will drag on the full year and make for the bigger story," analysts led by Tom O'Malley noted.

Intel sees its gross margins bottoming in March, but with growth expected to come primarily from CCG and, to a lesser extent, IFS, Barclays analysts expect limited margin expansion until the Panther Lake ramp begins.

"This reset is just another in a long line of resets, and with INTC largely in a transition phase between CEOs, strategies, and node cycles, we don't expect fundamentals to matter to investors near-term," they added.

Wolfe Research analysts shared similar remarks, noting that gross margins "should begin to improve in calendar year 2026 but manufacturing profitability will take time."

Investing.com-- Mizuho analysts have lowered their price target on Intel Corporation (NASDAQ:INTC) (NASDAQ: INTC), saying that the semiconductor giant faces ongoing challenges in the PC and server markets.

Analysts lowered PT to $20 from $21 while maintaining a "Neutral" rating.

Intel reported a stronger-than-expected December quarter but provided softer-than-expected guidance for the March quarter, with revenue projected at $12.2 billion, below consensus estimates of $12.8 billion, analysts said.

Mizuho (NYSE:MFG) analysts pointed to several key concerns, including a roughly 15% sequential revenue decline in both its Client Computing Group (CCG) and Data Center and AI (DCAI) segments, as well as gross margins projected to drop 620 basis points quarter-over-quarter to 36%.

A primary factor in the downgrade was Intel’s AI roadmap, which has been pushed further behind competitors, Mizuho said in a note.

The company now expects to launch Jaguar Shores in 2027, lagging behind rivals such as Advanced Micro Devices Inc (NASDAQ:AMD), which is projected to generate $10-12 billion in AI revenue, and NVIDIA Corporation (NASDAQ:NVDA), estimated at $182 billion, analysts said.

Additionally, the server segment remains under pressure, with uncertainty surrounding the launch of Clearwater Forest in the first half of 2026., they added.

Despite potential long-term benefits from the CHIPS Act and SCIP funding, Mizuho analysts cited ongoing execution risks, leadership uncertainty, and competitive pressures in AI, server, and PC markets as reasons for the price target cut.

While Intel's transition to a foundry model and geopolitical positioning could provide future upside, near-term profitability and execution remain concerns, analysts stated.