Intel INTC reported Q1 results after market close yesterday. The world’s largest chipmaker smashed estimates for both earnings and revenues but provided a downbeat outlook for the second quarter, citing weak PC demand from consumers and macroeconomic uncertainty.
Disappointed by the weak guidance, shares of INTC plunged 5% in after-market hours. Given this, ETFs like Invesco PHLX Semiconductor ETF SOXQ, First Trust Nasdaq Semiconductor ETF FTXL, First Trust NASDAQ Technology Dividend Index Fund TDIV, iShares Semiconductor ETF SOXX and iShares Edge MSCI USA Value Factor ETF VLUE, having the highest allocation to the world’s largest semiconductor maker, will be in focus.
Q1 Earnings in Focus
Earnings of 87 cents per share came above the Zacks Consensus Estimate of 80 cents but declined from the year-ago earnings of $1.39. Revenues declined 7% year over year to $18.35 billion and above the estimated $18.3 billion. Although data-center and AI revenues rose 22%, client computing revenues dropped 13% year over year. Network and edge, accelerated computing systems and graphics, Mobileye and Intel foundry services were up 23%, 21%, 5% and 175%, respectively (see: all the Technology ETFs here).
Intel has been grappling with a chip shortage. It continues to face challenges linked to persistent global supply chain problems and worries of weakness in its largest end market PCs, in the upcoming quarters. Intel expects revenues of about $18 billion and earnings per share of 70 cents for the second quarter of 2022. Both revenue and earnings per share guidance are well below the current Zacks Consensus Estimate of $19.02 billion and 91 cents per share, respectively (read: Time to Buy Beaten Down Chip Stocks & ETFs?).
For the full fiscal year, Intel has guided revenues of $76 billion and earnings per share of $3.60. Both revenue and earnings per share guidance are above the current Zacks Consensus Estimate of $75.31 billion and $3.48 per share, respectively.
ETFs to Tap
Invesco PHLX Semiconductor ETF (SOXQ)
Invesco PHLX Semiconductor ETF tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. Intel occupies the second position with 9% share in the basket.
Invesco PHLX Semiconductor ETF debuted in the space last year in June and has accumulated $61.8 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 39,000 shares.
First Trust Nasdaq Semiconductor ETF (FTXL)
First Trust Nasdaq Semiconductor ETF offers exposure to the most-liquid US semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. FTXL holds 30 stocks in its basket, with Intel taking the top spot at 8.8% share.
First Trust Nasdaq Semiconductor ETF has accumulated $89.3 million in AUM. The average trading volume is light at around 13,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #2 (Buy).
First Trust NASDAQ Technology Dividend Index Fund (TDIV)
First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. It holds about 93 securities in its basket. Of these firms, Intel takes the third spot, making up for 8% of the assets. From a sector look, about 42.3% of the portfolio is dominated by semiconductors & followed semiconductor equipment by software, IT services, and diversified telecommunications.
First Trust NASDAQ Technology Dividend Index Fund has amassed $1.7 billion in its asset base while trading in a volume of around 126,000 shares per day. It charges 50 bps in annual fees.
iShares Semiconductor ETF (SOXX)
iShares Semiconductor ETF follows the ICE Semiconductor Index and offers exposure to US companies that design, manufacture and distribute semiconductors. It holds 30 securities in its basket with INTC taking the third spot, holding 6.6% allocation.
iShares Semiconductor ETF has amassed $7.4 billion in its asset base and trades in a volume of about 1.5 million shares a day. The product charges a fee of 43 bps a year from investors and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: Semiconductor ETFs Enjoying Huge Investors Love).
iShares Edge MSCI USA Value Factor ETF (VLUE)
iShares Edge MSCI USA Value Factor ETF offers exposure to large- and mid-cap US stocks with lower valuations based on fundamentals and tracks the MSCI USA Enhanced Value Index. It holds 149 stocks in its basket, with Intel occupying the second position at 6.1% of assets. Information technology takes the largest share at 28.6%, while healthcare and communication round off the next two.
iShares Edge MSCI USA Value Factor ETF has amassed $12 billion in its asset base and charges 15 bps in annual fees. It trades in an average daily volume of 1.3 million shares and has a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Intel Corporation (INTC): Free Stock Analysis Report
iShares Semiconductor ETF (SOXX): ETF Research Reports
First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports
iShares MSCI USA Value Factor ETF (VLUE): ETF Research Reports
First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
Invesco PHLX Semiconductor ETF (SOXQ): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research