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3 Reasons Intel Corp. Should Hold a Financial Analyst Day in 2018

By Ashraf Eassa – Apr 13, 2018 at 12:00PM

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Investor transparency is a good thing.

Historically, chip giant Intel (INTC 4.66%) would hold what the company refers to as "investor meetings" (and what everyone else in the industry refers to as "analyst days") each year. 

During these events, Intel would have top executives, such as the CEO, CFO, as well as the general managers of the company's key business units give some interesting details about their businesses and lay out their respective visions for where their individual business units were headed. 

An Intel chip.

Image source: Intel.

These presentations have historically been both informative and, if I dare say, entertaining. On a personal level, I've followed Intel's investor meeting presentations for six years now, and I've always walked away with a better understanding of the business as well as increased confidence in the company's long-term future. 

An Intel spokesperson tells me that it's still "to be determined" as to whether Intel will host such an investor meeting this year. 

Here are three reasons Intel should go forth with holding such an event. 

1. Understanding Intel's long-term growth goals

During Intel's last investor meeting, the company laid out its financial objectives for the next three years. In particular, the company said it hopes to grow revenue at a "low-single digit" pace annually, and that it aims for its operating income to outgrow revenue (and for earnings per share to outgrow operating income thanks to buybacks and lower tax rates). 

Although it's only been about a year since Intel made those financial goals public, it'd be interesting to hear Intel's view of the progress it's making toward those goals and what its goals for the next three years are. 

2. Market insights

Intel serves a broad range of markets. Some of those markets are ones in which Intel has overwhelmingly dominant positions (PC processors, server processors), and others are ones in which Intel is the scrappy underdog (cellular modems, AI processors, and network silicon). 

I'd like to hear about Intel's current strategies to defend its market share in markets it dominates; with increasing competitive pressure in these markets, why should investors be confident that Intel can maintain high levels of share?

Moreover, there are areas where Intel isn't a leader but is quickly gaining share. Updates on Intel's progress in those areas, as well as its expectations in terms of market/revenue share gains over the next few years, would be quite useful. 

And finally, there are areas where Intel is simply way behind and is now trying to catch up, such as in the market for specialized machine-learning processors. Intel has some widely publicized efforts to go after those markets, but any updates on the company's progress there (e.g., customer engagements, reception to the company's current products and future product roadmap) could be quite useful in boosting investor confidence there. 

3. Manufacturing technology/product updates

Intel has routinely claimed that its in-house chip manufacturing capability is one of its biggest competitive advantages, though in recent years, the company's stumbles in chip manufacturing have hurt Intel's competitiveness in the marketplace

Last year, Intel hosted a separate event to discuss manufacturing technology specifically, although it's not looking like the company will be hosting one this year. However, if Intel were to host an investor meeting, I think it'd be important for the company to provide an update on its chip manufacturing efforts. 

Some insights into its expected cost structure on its upcoming 10-nanometer technology as well as the potential impact that ramping up the production of such products will have on the company's profit margins in 2019 would be useful. As an added bonus, Intel could also provide some insight into its manufacturing strategy with respect to its product portfolios across its various business units. 

This information would be useful in both trying to suss out how Intel's financial performance might look in the near term as well as providing insight into the company's long-term chip manufacturing efforts. 

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.

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