Intel Corporation (INTC): Q3 Earnings Watch

Intel should do very well with its PC chip business, in part thanks to its old pal Microsoft Corp. (Nasdaq: MSFT). The steep decline in PC shipments in 2013 slowed considerably this year. Many businesses and some retail customers were forced to upgrade to new PCs when Microsoft ended support for the 13-year-old operating system in April. The PC chip business still makes up 63% of Intel’s revenue.

Investors should also watch for better margins in INTC’s data center business, responsible for about one quarter of revenue. Here, too, the company is reaping the benefit of an upgrade cycle as well as the growth of cloud computing.

The Internet of Things: Intel has wisely targeted this area for future growth. While representing only 4% of sales now, the IoT Group saw revenue rise 24% in the last quarter. More of the same in Q3 would be a very positive sign for future INTC earnings growth. The IoT opens up huge markets for Intel. As the IoT grows, millions of chips will be embedded in objects like wearable technology and household appliances. Business Insider Intelligence estimates that by 2019 the Internet of Things will be double the size of all other chip markets combined.

Intel should also give an update on its stock buyback program.

Money MorningWritten By David Zeiler From Money Morning

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