Intel shares fell as much as 9% on Thursday after the company reported better-than-expected second-quarter earnings and said next-generation chips would come out later than expected.
This is how the company did it:
- Profits: Adjusted $ 1.23 per share, versus $ 1.11 per share as expected by analysts, according to Refinitiv.
- Income: $ 19.73 billion, compared to $ 18.55 billion as expected by analysts, according to Refinitiv.
Regarding guidance, Intel requested $ 1.10 in earnings per share on an adjusted basis and $ 18.2 billion in revenue for its fiscal third quarter. Analysts surveyed by Refinitiv expected $ 1.14 in adjusted earnings per share on $ 17.90 billion in revenue.
A quarter ago, Intel decided not to give guidance for the entire year, but on Thursday announced a new forecast for the entire year. You now see $ 4.85 in adjusted earnings per share and $ 75 billion in revenue. The consensus among analysts surveyed by Refinitiv was $ 4.81 in adjusted earnings per share and revenue of $ 73.86 billion.
The company announced more delays in producing chips with small 7-nanometer transistors for better performance as it seeks to catch up on AMD, which already has 7-nanometer products available. “The primary driver is Intel’s 7nm process performance, which according to recent data is now trending approximately twelve months behind the company’s internal target,” the company said in a statement. AMD shares rose 6% after hours after Intel’s announcement.
The fight to get out competitive chips comes after Intel had supply problems, which in turn affected device makers like Dell and HP.
Intel’s revenue increased 20% year-over-year for the quarter ended June 27, compared to 23% growth a quarter earlier, Intel said.
Intel’s main business unit, the Client Computing Group that makes PC chips, generated $ 9.50 billion in revenue in the quarter, growing 7% annually and beating the FactSet consensus of $ 9.10 billion. Industry research group Gartner estimated that second-quarter PC shipments grew again year-over-year in the quarter, after a decrease in the first quarter relative to the pandemic.
The Data Center Group, which focuses on chips for cloud providers and server manufacturers, contributed $ 7.12 billion in revenue, 43% more than the FactSet consensus of $ 6.61 billion.
The nonvolatile memory solutions group had revenues of $ 1.66 billion, representing a growth of 76% and exceeded the consensus of $ 1.29 billion.
In the quarter, Intel announced the $ 900 million acquisition of Moovit, a mobility startup, and the $ 150 million sale of its home gateway platform business to MaxLinear. It also introduced new chips for PCs and gaming laptops.
Leaving out-of-hours movement aside, Intel shares have increased approximately 1% since the start of the year, while the S&P 500 remains stable.
Executives will discuss the results with analysts in a conference call at 5 pm ET.
This is breaking news. Please check for updates.
Correction: This article originally included Intel’s quarterly earnings per share instead of adjusted earnings per share.
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