Intel Reported Better Than Expected Third Quarter Earnings

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Intel Reported Better Than Expected Third Quarter Earnings

On Thursday, Intel came up with a forecast of fourth-quarter revenue and margins that are above Wall Street estimates. The company is optimistic about higher sales of personal computers. Apart from that, there are various improvements in Intel’s data center business and a higher number of customers looking for Intel’s manufacturing services.

According to Reuters.com,

While Intel remains under heavy competitive pressure from Nvidia (NVDA.O) in the data center chip market, the easing PC slump and stabilization of its server chip business helped raise gross margins faster than analysts had expected. The company’s executives had warned that it could take well into next year for margins to rise significantly.

This led to higher prices of Intel shares. After the closing bell on Thursday, the share prices of the company increased by 8%. Apart from that, Intel also secured three customers for its chip contract manufacturing business. Pat Gelsinger, the CEO of Intel, is optimistic about closing a deal for a fourth customer by the end of the year.

Furthermore, there has been a decline in global PC shipments to 7% in the third quarter after the percentage dipped by double digits this year. In addition to that, many expect the market to return to its growth phase during the holiday season by the end of the year.

Intel adjusted its current-quarter revenue forecast from $14.6 billion to $15.6 billion. However, according to LSEG estimates, the revenue is $!4.35 billion. Furthermore, Intel also forecasted that its fourth-quarter profit per share would be 44 cents. Here, analysts estimated that value to be 32 cents.

The higher expectations are due to Intel’s improvement in its PC business, which will likely drive more revenue in the fourth quarter. However, if the company wants to get back to its old days, it needs to focus more on manufacturing.

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