Chipmaker Intel (INTC) late Thursday crushed Wall Street’s earnings target for the third quarter, but disappointed investors with its sales and outlook. Intel stock fell hard in extended trading.
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The Santa Clara, Calif.-based company earned $1.71 a share on sales of $18.1 billion in the September quarter, using non-GAAP accounting figures. Analysts expected Intel to earn $1.11 a share on sales of $18.24 billion, according to FactSet. On a year-over-year basis, Intel earnings rose 59% while sales climbed 5%.
The results marked Intel’s return to sales growth after four straight down quarters. Earnings growth was positive for the second consecutive quarter following three flat or down quarters.
For the current quarter, Intel expects to earn an adjusted 90 cents a share on adjusted sales of $18.3 billion. Wall Street had predicted Intel earnings of $1.01 a share on sales of $18.25 billion in the fourth quarter, FactSet said. In the year-earlier period, Intel earned $1.52 a share on sales of $19.98 billion.
Intel’s non-GAAP sales figures exclude its Nand memory chip business, which it is selling to SK Hynix.
Intel Stock Tumbles
In after-hours trading on the stock market today, Intel stock tumbled 6.7%, near 52.25. During the regular session Thursday, Intel stock rose 1.1% to 56.
“Q3 shone an even greater spotlight on the global demand for semiconductors, where Intel has the unique breadth and scale to lead,” Chief Executive Pat Gelsinger said in a news release.
Intel is in the early stages of its turnaround and showing clear progress, Gelsinger said.
“We broke ground on new fabs, shared our accelerated path to regain process performance leadership, and unveiled our most dramatic architectural innovations in a decade,” he said. “We also announced major customer wins across every part of our business.”
PC Chip Sales Fall 2%
Sales in Intel’s PC chip business fell 2% year over year to $9.7 billion in the third quarter. The group was hampered by industrywide component shortages that lowered notebook PC production.
Intel’s data center chip business saw sales rise 10% to $6.5 billion in the September quarter.
Intel stock ranks No. 22 out of 40 stocks in IBD’s semiconductor manufacturing industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 43 out of 99.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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