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Intel stock drops more than 5% as earnings beat eclipsed by revenue, outlook misses

Intel Corp. shares dropped in the extended session Thursday after the chip maker’s revenue and data-center sales fell just short of Wall Street estimates while the company provided a big earnings beat but a lower-than-expected earnings forecast.

Intel 
INTC,
+1.14%

shares dropped 6% in the extended session, following a 1.1% rise in the regular session to close at $56.00.

Intel reported third-quarter net income of $6.82 billion, or $1.67 a share, compared with $4.28 billion, or $1.02 a share, in the year-ago period. After adjusting for acquisition-related expenses and other items, Intel reported earnings of $1.71 a share, compared with $1.11 a share from a year ago.

Revenue rose to $19.19 billion from $18.33 billion in the year-ago quarter, snapping a streak of four consecutive quarters of revenue declines. Excluding the company’s divested memory business, revenue came in at $18.09 billion

Analysts expected adjusted earnings of $1.11 a share on revenue of $18.24 billion, based on Intel’s forecast of $1.10 a share and revenue of about $18.2 billion.

Revenue in the important data-center category rose 10% to $6.5 billion but fell short of the Street’s estimate of $6.67 billion.

Revenue from client computing, the traditional PC group, declined 2% to $9.7 billion compared with Wall Street’s estimate of $9.61 billion; nonvolatile memory solutions revenue declined 4% to $1.1 billion when analysts expected $991 million; “Internet of Things,” or IoT, revenue rose 54% to $1 billion versus the expected $987.6 million; and Mobileye revenue rose 39% to $326 million versus the Street’s expected $351.3 million.

For the fourth quarter, Intel forecast revenue of about $19.2 billion, or $18.3 billion when removing the memory business, and GAAP earnings of 78 cents a share and non-GAAP earnings of 90 cents a share. Analysts on average expected adjusted fourth-quarter earnings of $1.01 a share on revenue of $18.25 billion.

For the year, Intel expects Intel forecast revenue of about $77.7 billion, or $73.5 billion when removing the memory business, and GAAP earnings of $4.50 a share and non-GAAP earnings of $5.28 a share. Analysts on average expected adjusted full-year earnings of $4.79 a share on revenue of $73.59 billion.

Intel also said its chief financial officer, George Davis, plans to retire in May 2022.

Over the past 12 months, Intel stock has gained 4.7%. Over the same period, the Dow Jones Industrial Average  
DJIA,
-0.02%

  — which counts Intel as a component — has risen 26%, the S&P 500 index 
SPX,
+0.30%

 and the tech-heavy Nasdaq Composite Index  
COMP,
+0.62%

 have both gained 32%, and the PHLX Semiconductor Index 
SOX,
+1.12%

 has grown 44%.

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