One of the world's largest tech companies, Intel, reported its earnings yesterday. While earnings came in ahead of expectations, guidance proved to be a cause for concern; ultimately leading to massive declines. Today, we'll talk about what we saw from earnings, how the stock reacted to the news, what we can expect to see moving forward, and how binary options traders can take advantage of the trends.
Intel's Q4 Results
As mentioned above, Intel reported its results for the fourth quarter yesterday. At first glance, it seemed as though the report was great… that is, until you looked at forward looking guidance. Here's what we saw from the report…
Revenue – In terms of top-line revenue, analysts expected for Intel to produce $14.8 billion. The company beat these expectations, reporting $14.9 billion in revenue for the quarter.
Earnings – Intel also beat analyst expectations with regard to earnings. While analysts expected the company to generate earnings in the amount of $0.63 per share in the quarter, Intel actually produced earnings in the amount of $0.74 per share.
Guidance – Unfortunately, guidance proved to be a major cause for concern. Analysts expected the company to announce that guidance in revenue for the first quarter would come in at $14.6 billion. Unfortunately, that wasn't the case. The company set guidance for the first quarter's revenue at $14.1 billion, insinuating a slowing trend to come.
How The Market Reacted To The News
As traders in the financial market, we've come to expect that any time there is negative news with regard to a publicly traded company, we can expect to see a negative reaction in the market. That's exactly what we're seeing as a result of the weaker than expected guidance. Yesterday, Intel closed at $29.76 per share after a loss of 9.10% on the session.
What We Can Expect To See From Intel Moving Forward
Moving forward, I have a relatively mixed opinion of what we can expect to see, depending on how far forward you plan to look. In the short term, poor guidance is likely to lead to further fears among investors. As a result, we can expect to see further declines on the stock. However, in the long run, my opinion is very different. The reality is that Intel is one of the largest tech companies in the world, and they didn't get into that position by not knowing how to solve problems. The bottom line is that the company has the ability to bounce back from just about anything. With that said, I'm expecting to see strong gains in the long run.
How Binary Options Traders Can Take Advantage Of The Trends
As mentioned above, I'm expecting to see further declines in the short term outlook for Intel. As a result, binary options traders should be watching the stock for strong put option opportunities over the next several weeks. However, it's also important to keep an eye on the news surrounding the stock. After all, it wouldn't take much to see a reversal in the positive direction. If you notice positive news, shift your strategy to a call option strategy to take advantage of the resulting uptrends. Keep an eye on the latest financial news.
What Do You Think?
Where do you think Intel is headed moving forward? Let us know your opinion in the comments below!
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