Intel beats Q3 estimates, raises outlook despite worries about demand
Intel Corp on Thursday beat Wall Street estimates for third-quarter revenue and profit and raised its full-year revenue forecast, easing concerns about slowing chip demand amid the U.S.-China trade war.
The chipmaker’s shares were up 4.8 per cent at US$54.75 in extended trading.
Results of the Santa Clara, Calif.-based Intel has come as a relief to the semiconductor industry after dour forecasts from two major chipmakers earlier this week aggravated concerns.
After years of acquisitions outside its core area of processing chips under previous leaders, Intel chief executive Bob Swan has set a goal of becoming more disciplined about spending, slowing investments in areas like memory chips and shedding struggling businesses.
Earlier in July, Intel sold its modem business to Apple Inc in a deal valued at US$1 billion.
“Our priorities are accelerating growth, improving our execution ...,” Swan said on Thursday.
Intel, which is in a race against rival Taiwan Semiconductor Manufacturing Co Ltd to make smaller chips, said the move to the newer process was on track and it would have chips from its next generation by 2021.
Intel’s board has approved a US$20-billion increase in its stock repurchase program, the company said on Thursday.
Revenue in Intel’s client computing business, which caters to PC makers and is the biggest contributor to sales, fell five per cent to US$9.7 billion, but still beat FactSet estimates of US$9.60 billion.
Revenue from its higher-margin data centre business rose four per cent to US$6.4 billion in the quarter, while analysts were expecting revenue of US$5.62 billion, according to FactSet.
Intel forecast fourth-quarter revenue of US$19.2 billion, and adjusted earnings of US$1.24 per share.
Analysts on average were expecting revenue of US$18.82 billion and a profit of US$1.21 per share, according to IBES data from Refinitiv.
For the full year, the company expects revenue of US$71 billion, up from its earlier forecast of US$69.5 billion. That came in above analysts’ estimate of US$69.43 billion.
Intel recorded a flat growth in net revenue at US$19.19 billion, beating estimates of US$18.05 billion.
Excluding items, the company earned US$1.42 per share, above estimates of US$1.24 per share.