Intel Corporation Beats Earnings Estimates But Falls On Weak Guide

Intel Corporation Beats Earnings Estimates But Falls On Weak Guide

Intel released its latest earnings report after closing bell tonight, posting non-GAAP earnings of 80 cents per share on revenue of $15.8 billion. Analysts had been expecting the chip maker to report earnings of 73 cents per share on $15.58 billion in revenue.

In last year’s third quarter, the company reported 64 cents per share in earnings on $14.46 billion in sales. Intel increased its third quarter outlook in September due to inventory replenishment for its PC supply chain. The new guidance called for $15.6 billion in sales, +/-$300 million, compared to management’s previous outlook of $14.9 billion, +/-$500 million.

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Intel posts record Data Center and IoT revenues

Intel’s GAAP earnings grew to 69 cents per share from last year’s 54 cents per share. The chip maker had guided for a gross margin of around 63%, but it managed a GAAP gross margin of 63.3% and a non-GAAP gross margin of 64.8%. Last year’s margins were 63% and 63.5%, respectively.

Intel’s Client Computing Group revenue grew 5% year over year to $8.9 billion, while its Data Center Group revenue increased 10% to $4.5 billion. Revenue from the Internet of Things segment ticked upward 19% from last year to $689 million, while non-Volatile Memory Solutions revenue declined 1% to $649 million. Intel Security Group revenue increased 6% year over year to $537 million, while Programmable Solutions revenue declined 9% quarter over quarter to $425 million.

Intel guides for a weak Q4

For the fourth quarter, the chip maker expects $15.7 billion in sales, +/-$500 million, and a gross margin of 61% on a GAAP basis and 63% on a non-GAAP basis, +/- a couple of percentage points on both of those. Analysts are currently expecting Intel to post 77 cents per share in earnings and $15.86 billion in the fourth quarter.

The company now expects total restructuring and other charges to amount to $2.3 billion, with most of the rest of the charges due between now and the middle of next year. It projects that $250 million of that will come in the fourth quarter.

Shares of Intel tumbled in after-hours trades, falling by as much as 3.52% to $36.41.

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