Intel surges 8% on an earnings beat and better-than-expected forecast

Shares gained as much as 8% in early trading Friday.
The company gave a rosy outlook for Q1 2020 earnings, and announced a 5% increase to its quarterly dividend.
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Shares of Intel gained as much as 8% in early trading Friday following the company's fiscal fourth-quarter and full-year 2019 earnings report on Thursday.

The company handily beat Wall Street expectations, gave a rosy outlook for its first-quarter 2020 earnings report, and announced a 5% increase to its quarterly cash dividend.

Here's what the company reported versus what analysts by surveyed Bloomberg expected:

Adjusted earnings per share: $1.52 reported versus $1.25 (expected)
Revenue: $20.21 billion reported, versus $19.22 billion (expected)

Intel's record revenue growth in the quarter was led by its data center group, which grew 19% year over year driven by increased demand in cloud service. The company's PC-centric revenue was up 2% year over year.

"One year into our long-term financial plan, we have outperformed our revenue and EPS expectations," said Bob Swan, Intel's CEO, in a press release.

He continued: "Looking ahead, we are investing to win the technology inflections of the future, play a bigger role in the success of our customers and increase shareholder returns."

Intel, the largest maker of server chips, announced in the fourth quarter the $2 billion acquisition of Habana Labs, an artificial intelligence chip company. In addition, Intel completed in the fourth quarter a sale of most of its smartphone modem business to Apple a move that generated $16.9 billion in free cash flow and returned 113% to shareholders in 2019, according to an earnings presentation.

Going forward, the company forecasts non-GAAP first-quarter earnings of $1.30 per share and revenue of $19 billion, higher than Wall Street analysts had expected. Intel also forecasts that for the full year 2020 it will generate non-GAAP earnings of $5 per share and approximately $73.5 billion in revenue, higher than consensus estimates.

Intel's data center business is benefiting from a rush to build up facilities like those operated by Google Cloud, Facebook, and Amazon's AWS. On a call with analysts Thursday, Swan said the company anticipates that the data center business will see growth in the high single digits in 2020.

Intel gained 6% year to date through Thursday's close.

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