Intel (INTC: $34/share) solidly beat earnings and revenue estimates for Q2. 6% year over year revenue growth in its PC Client Group, along with improving margins, drove the higher than expected earnings. I called for a turnaround in the PC Client group last November when the stock was trading at ~$24/share.

Intel’s Data Center Group continues its robust growth as well, but mobile continues to be a struggle. The use of significant contra revenue payments to increase adoption means that mobile revenue was only $51 million. I originally had high hopes for Intel’s mobile group, but now I don’t see this segment contributing significantly to the bottom line for a couple more years.

Still, I don’t think mobile will be a total failure, and the short-term pain Intel is taking in this segment will be beneficial in the long-term. In my most recent article, I said that modest growth over the next 15 years makes Intel worth ~$41 share today, and this earnings report strengthens my belief in that fair value estimate.

Sam McBride contributed to this report.

Disclosure: David Trainer and Sam McBride receive no compensation to write about any specific stock, sector or theme.

Feature Photo Credit: Intel Free Press (Flickr)

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