Intel Raises Outlook, Sending Shares Higher--2nd Update
25 October 2019 - 8:47AM
Dow Jones News
By Sarah E. Needleman
Intel Corp. reported stronger third-quarter earnings and again
raised its full-year outlook, helping ease investor concerns about
chip-supply bottlenecks at the company and a broader slowdown in
demand.
Shares of the chip maker jumped more than 7% in after-market
trading.
Intel on Thursday reported adjusted earnings of $1.42 a share,
compared with $1.40 for the year-prior period. Analysts surveyed by
FactSet were expecting earnings of $1.23 a share.
Third-quarter revenue for the Santa Clara, Calif., company rose
to $19.19 billion from $19.16 billion, also topping
expectations.
Intel, the largest chip maker in the U.S. by revenue, said sales
of chips used in data centers helped deliver the
stronger-than-expected result. Those chips are heavily used in the
booming cloud-computing market. Microsoft Corp., the No. 2 in cloud
computing behind Amazon.com Inc., gave an upbeat outlook for its
cloud business.
Intel also said its memory business, which has been
underperforming this year compared with last, is starting to turn
around. "It's still down, but it's coming back," Intel finance
chief George Davis said. He said the momentum helped give the
company confidence to raise its full-year outlook for a second
period in a row.
The company reported a 5% drop in PC-related revenue despite
healthy demand for the computers.
PC shipments globally rose to 70.9 million units, marking the
best third-quarter performance since 2015, according to data from
Canalys. The 4.7% increase from a year earlier was the strongest
growth since the first quarter in 2012, the research firm said.
"Last year, there was so much demand for PC processors that we
were actually selling down our inventory," Mr. Davis said. Without
that buffer, he said, Intel has struggled to keep pace this year.
"As we get back to having the supply, we expect those volumes to go
back."
Intel said it expects $19.2 billion in sales in the current
quarter. That outlook could help investors overcome broader
concerns that technology spending by large businesses is
slowing.
Texas Instruments Inc. this week gave muted guidance for the
current quarter, saying customers were more cautious.
Intel raised its full-year revenue outlook by $1.5 billion to
$71 billion. It also boosted its full-year earnings outlook to
$4.60 a share from $4.40.
"We now expect to deliver a fourth record year in a row," Intel
Chief Executive Bob Swan said in a statement.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
October 24, 2019 17:32 ET (21:32 GMT)
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