Intel Dips After Its Weak Q1 Guidance Overshadows Strong Q4 Results

Intel reported its fourth-quarter financial performance today, including revenue of $14.72 billion and profit per share of $0.74. Both figures beat expectations: The street had expected $14.70 billion in revenue and $0.66 in profit.

But neither the company’s narrow profit beat, nor its wider profit beat, have sent its shares higher in after-hours trading. Rather, at issue is its first-quarter, 2015 guidance of $13.7 billion in revenue. That is below investor expectation, at current tip, of $13.77 billion. Intel shares are down just under a percent after hours.

The company generated $5.8 billion in cash during the period, along with net income of $3.7 billion.

For the full year, Intel had revenue of $55.9 billion, net income of $11.7 billion and earnings per share of $2.31. The company’s revenue is mildly cyclical due to the impact of fourth-quarter holiday shopping. That’s the reason the company’s expected sequential revenue decline into 2015 is neither surprising nor worrying. Instead, investors are only quibbling that they had expected a slightly smaller delta between the two periods.

Importantly, Intel did meet its goal of shipping 40 million processors for tablets in the year, ending 2014 with a total of 46 million shipped.

Looking ahead, Intel expects its revenue to grow “mid-single digit percentage points” in 2015. At this year, Intel laid out its plan for the year, including a focus on increasingly intelligent computing, and, as with everyone, wearables. Importantly, the company made a commitment to spend $300 million over the next few years to increase the diversity of its workforce.

Intel’s modestly robust report sets the stage for other players in the PC market — Microsoft, AMD, and others. It will be interesting to see if a stabilizing PC market can float more than just Intel’s boat.