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Intel (INTC) Revenues Q3 2021

Intel Shares fell more than 8% on Thursday’s long-term trading after blaming a weaker sales report and a 2% contraction in the PC chip business in the quarter to October 2 for a shortage of parts across the industry. ..

Intel also warned Thursday that gross profit and free cash flow would drop to lower levels in the next few years as it invests in research and development and builds a new chip factory.

Here’s an estimate of how Intel did and Refinitiv:

  • EPS: $ 1.71, adjusted, $ 1.11 forecast.
  • Revenue: Expected $ 18.24 billion, compared to adjusted $ 18.1 billion.

Intel said it expects adjusted sales of about $ 18.3 billion in the fourth quarter, compared to analysts’ forecast of $ 18.24 billion.

Intel’s largest business, the Client Computing Group, was $ 9.7 billion, down 2% year-on-year. This includes PC chip revenue. According to Intel, PC sales are primarily due to a decrease in the number of laptops due to chip shortages, and customers may be missing other parts needed to complete the computer assembly. That is.

“We call it a matchset. There may be a CPU, but no LCD or no Wi-Fi. Data centers struggle especially with some power chips and some networks. Or an Ethernet chip. ” Intel CEO Pat Gelsinger said in an interview with CNBC.

Gelsinger said PC demand remained strong and he did not expect the semiconductor shortage to end by 2023.

“We’re in the worst of conditions right now, and we’ll get better each quarter next year, but we’ll be out of balance until 2023,” Gelsinger said.

PC sales were strong last year as consumers around the world needed new laptops and desktops to work from home. However, according to analysts, the pandemic-related PC surge may be nearing its end due to sluggish sales.

Gelsinger said he believes PC sales will continue to grow. “We think the PC business is now structurally large, with one million units a day,” Gelsinger said.

Intel’s Data Center Group, which sells processors and other silicon for data centers, posted sales of $ 6.5 billion, up 10% year-over-year, but fell short of analysts’ estimates of $ 6.66 billion. .. According to Intel, the annual increase is due to increased demand for on-premises servers for businesses and governments.

Intel is spending $ 20 billion this year, including a new semiconductor factory in Arizona, so it’s in a period of huge capital spending. Investors are closely watching Intel’s gross profits as Intel spends its time launching new production lines to capture its semiconductor performance rivals.

According to Intel, gross profit margin, or revenue remaining after considering cost of sales, will not fall below 50%, but will decline and then recover. In the third quarter, Intel reported a gross profit of 56%.

In addition to continuing to design and manufacture its own processors, the company plans to shift its business model to manufacturers or foundries of other chip designers.

The quest to become a foundry is an expensive initiative that can be costly with the support of US and European governments, but as Intel predicted, the semiconductor industry will double in size over the next decade. When it comes to, it can be very profitable.

According to Intel, Intel registered the US government as a foundry customer during the quarter.

Intel’s gross margin for the quarter was 56%, up 2.9% year-on-year. In addition, the Internet of Things group grew 54% to $ 1 billion, and mobileye, a subsidiary of automotive chips, grew 39% to $ 326 million.

Intel CFO George Davis has announced plans to retire in May 2022.

Intel may provide insights into how it sees the transition to foundries and the technology roadmap on Analyst Day next month. Previously scheduled for November.

Intel (INTC) Revenues Q3 2021

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