Pawel Mazur/Dreamstime Shares of U.S. chip maker Intel slumped in after-hours trading Thursday, despite reporting earnings that easily beat Wall Street’s expectations. The company sold more chips for personal computers, but investors seem focused on a dip in Intel’s ever-important data center revenue. Shares of Intel (ticker: INTC) dropped 1.9% in the extended session. The stock, which closed at $62.57 Thursday, is up about 40% since late October. Intel reported first-quarter net income of $3.4 billion, or 82 cents a share, compared with net profit of $5.7 billion, or $1.31 a share, in the year-ago quarter. Revenue dipped 1% to $19.7 billion. Excluding the company’s flash memory business, and a legal judgment, among other things, Intel reported earnings of $1.39 a share. Non-GAAP revenue was flat at $18.6 billion. Analysts had expected adjusted earnings of $1.15 on revenue of $17.74 billion. “This is a pivotal year for Intel,” CEO Pat Gelsinger said. “We are setting our strategic foundation and investing to accelerate our trajectory and capitalize on the explosive growth in semiconductors that power our increasingly digital world.” On Thursday, Intel credited strong personal computer demand for the billion-dollar beat, and “initial recovery” of its enterprise and government sales that contribute to is data center segment. Revenue in its PC segment grew 8% to $10.6 billion, when Wall Street expected $10.02 billion. Nonetheless, the company’s data center revenue fell short of expectations, declining 20% to $5.6 billion. Wall Street had expected $5.84 billion. Weeks ago, at the same time the company announced its future manufacturing plans, Intel said that it would report results above its guidance but didn’t provide precise figures. Intel’s self-driving technology unit, Mobileye, was a bright spot. Revenue grew 48% to $377 million. A $2.18 billion judgment, stemming from a recent loss in a Texas patent fight, also weighed on first-quarter profit. Intel said it “strongly disagrees with the jury’s verdict in March and intends to appeal.” The company said it expected non-GAAP second quarter earnings of $1.05 a share, and revenue of $17.8 billion, excluding the company’s flash memory business. Intel sold the memory unit last year, but the deal hasn’t yet closed. Including flash revenue, Intel expects to report second-quarter revenue of $18.9 billion. The consensus for adjusted first-quarter earnings is $1.12 a share on sales of $17.64 billion. Intel raised its guidance for the year to non-GAAP earnings of $4.60 a share and revenue $72.5 billion, excluding its flash memory unit. Shares of Intel have gained 4.1% over the past 12 months. Over the same period, the PHLX Semiconductor index is up 86%.
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