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Intel shares cratered about 16% in after-hours trading Thursday after the chipmaker paired a third-quarter beat – its strongest data-center growth in 15 years – with a holiday-quarter outlook that landed well below what the market had been pricing in.
The quarter. Revenue rose 21% from a year earlier to $16.5 billion, edging past the roughly $16.47 billion consensus, and non-GAAP earnings of $0.52 a share more than doubled last year’s $0.23 and cleared the roughly $0.40 analysts had expected, the company said in its earnings release. Gross margin widened to 43%, up 4.8 percentage points, and Intel generated $5.1 billion in cash from operations.
The engines. Data Center and AI revenue surged 78% to $7.3 billion, the unit’s fastest growth in 15 years, and Intel Foundry revenue jumped 58% to $6.7 billion. The PC business went the other way: Client Computing revenue fell 5% to $8.1 billion.
The outlook. What hit the stock was the guide. Intel forecast fourth-quarter revenue of $15.0 billion to $16.0 billion, down from the quarter just reported, with non-GAAP earnings of $0.25 a share and gross margin compressing to about 37% on a GAAP basis. Chief financial officer David Zinsner said the PC slowdown will continue “at least through the first half of next year,” even as he noted that revenue, gross margin and earnings per share all exceeded the company’s own guidance in the third quarter.
The supply problem. Chief executive Lip-Bu Tan said Intel’s immediate priority is unlocking supply for what he called “extraordinary demand for our Xeon family,” pointing to improving execution and progress on process technology, including the October release of the 14A 0.9 process design kit and new packaging and equipment collaborations.
The tape. The after-hours slide to roughly $77 followed a 3.6% drop in regular trading to $92.07, capping a punishing day for big-brand tech earnings: Alphabet fell 12.6% in the regular session and Amazon slid about 7% after its own report. For Intel, a clean beat on the quarter behind it bought nothing once the outlook landed.
JBizNews Desk | Wall Street
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