TLDR
- Intel (INTC) stock fell about 26% to $68.30 in premarket trading Friday, after closing Thursday at $92.07.
- Q3 adjusted EPS of 52 cents beat the 41 cents expected, and revenue rose 21% to $16.5 billion.
- Q4 guidance missed, with EPS of 25 cents versus 45 cents expected and revenue of $15 billion to $16 billion versus about $17.3 billion.
- Weak PC sales and a fatal plant explosion in Israel, worth about $300 million in lost Q4 revenue, drove the miss.
- Data center and AI revenue jumped 78%, and foundry revenue rose 58% to $6.7 billion.
Intel (INTC) stock fell about 26% to $68.30 in premarket trading Friday. It closed Thursday at $92.07.
The drop followed a third-quarter report that beat on earnings but came with a weak fourth-quarter outlook. A fatal explosion at an Israel plant added to the pain.
Even after the slide, the stock is up about 150% this year. It had already fallen 35% from its June 22 record high before the report.
Q3 Results Beat on Earnings
Adjusted earnings came in at 52 cents a share, up from 23 cents a year ago. Analysts expected 41 cents, according to FactSet.
Revenue rose 21% year over year to $16.5 billion. Analysts were looking for $16.5 billion to $16.6 billion.
Data center and AI revenue jumped 78% from a year ago. Data center sales topped $7.3 billion, well above the $6.6 billion estimate.
PC chip sales were the weak spot at $8.1 billion. Analysts had expected $8.8 billion.
Client computing revenue fell 5% from last year. John Pitzer, Intel’s head of investor relations, said the PC market weakened faster than the company expected.
Tough comparisons to last year’s Windows 10 end of support are part of the problem. Rising PC prices and costly memory chips are also cutting into demand.
Q4 Guidance Falls Short
Intel expects adjusted earnings of 25 cents a share in the fourth quarter. Wall Street was looking for 45 cents.
Revenue guidance is $15 billion to $16 billion. Analysts had penciled in about $17.3 billion.
The explosion in Israel killed two employees and disrupted production. Intel says it accounts for roughly $300 million of the revenue miss.
Pitzer said PC weakness is likely to remain a headwind next year. That segment makes up about half of Intel’s revenue.
The foundry was a bright spot on sales, with revenue up 58% to $6.7 billion against a $6.1 billion estimate. The unit still posted an operating loss of $1.9 billion.
Intel says chip output is beating expectations and interest in its packaging technology is strong. The Information reports Google ordered 3 million custom Tensor Processing Units, and Nvidia is reportedly in talks to use the foundry too.
Reuters reports Intel is also talking with SK Hynix about leasing space at its Ohio facility. Intel stock was trading near $68 before Friday’s open.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
