(C) Reuters. Intel Earnings, Revenue Beat in Q2
By Yasin Ebrahim
Investing.com – Intel slumped after-hours on Thursday as a fall in margins and delays to rolling out its next-generation chips offset better-than-expected earnings and revenue.
Intel Corporation (NASDAQ:INTC) fell more than 8% on the news.
The company said it would further delay the production of chips with 7-nanometer transistors. “The primary driver is the yield of Intel’s 7nm process, which based on recent data, is now trending approximately twelve months behind the company’s internal target,” the company said in a statement.
Intel announced earnings per share of $1.23 on revenue of $19.73 billion. Analysts polled by Investing.com anticipated EPS of $1.11 on revenue of $18.53 billion.
The beat on the bottom line comes despite falling margins as the company ramped up chip production. “Intel is accelerating its transition to 10nm products this year with increasing volumes and strong demand for an expanding line up,” the company said.
Gross margin compressed to 54.8% from 61.6%, and missed consensus of 55.9%.
Its client computing group business, which makes up about half of overall revenue, grew up 7% for the quarter year-on-year.
The data center group, its higher-margin business, saw revenue grow 43% for the quarter.
The company reinstated guidance for the full year, forecasting revenue of $75 billion and earnings of $4.53 a share.
“Intel has produced a strong quarter largely meeting analysts’ expectations, but the guidance for the current quarter doesn’t seem quite strong. That suggests that the initial boost in demand coming from the COVID-19 pandemic is weakening and investors need to adjust their expectations,” Investing.com analyst Haris Anwar said.
Intel Earnings Beat in Q2, but Weaker Margins, Next-Gen Chip Delay Weigh
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