Intel, a new record quarter but not in all sectors

Intel, a new record quarter but not in all sectors


Intel recently released its earnings report for the second quarter of 2021, the tenth consecutive quarter during which it managed to surpass estimates, recording revenues of $ 19.6 billion. Intel reported that PC sales increased 33% year-on-year, considering both the notebook and desktop markets. Unfortunately, the same cannot be said for the server division, so much so that the company has had to reduce its gross margin prospects. Additionally, CEO Pat Gelsinger declined to comment on recent reports that the company is in talks to purchase GlobalFoundries for $ 30 billion.

Credit: Intel Intel says it will ship several million of Alder Lake chips to its partners in the second half of this year and which has already placed 50 million Tiger Lake CPUs on the market. However, the company also warned it expects a “particularly acute” shortage for the third quarter. Intel remains optimistic, however, as it has raised its full-year outlook to $ 73.5 billion. Gelsinger expects the most severe chip shortage to run out this year, but it will take an additional year, or perhaps more, for the market to fully stabilize.

Intel's desktop chip volumes have increased 15% year-over-year, while notebooks saw a staggering 40% year-over-year (YoY) increase. These important results, however, were also achieved thanks to price cuts, as Intel's average selling prices (ASP) fell 5% and 17% for desktops and notebooks, respectively, indicating that the company is employing this strategy. to remain competitive.

Credit: Intel Credit: Intel Intel also announced that it now produces more 10nm wafers than 14nm and that it has reduced manufacturing costs to 10nm by 45% year-over-year. Intel's Data Center Group (DCG) posted revenue of $ 6.5 billion during the quarter, down 9% from the previous year. Intel will present roadmaps and an update on its process and packaging technologies during its Intel Accelerated Webcast on July 26 at 2:00 PM PT. The event will be streamed on Intel Newsroom.

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Intel Shares Slump As Muted 2021 Forecast, Margins Cloud Solid Earnings

a close up of a blue wall: Intel Shares Slump as Muted 2021 Forecast, Margins Cloud Solid Earnings © TheStreet Intel Shares Slump as Muted 2021 Forecast, Margins Cloud Solid Earnings

Intel Corp. shares slumped lower Friday after the chipmaker posted stronger-than-expected second quarter earnings but issued a tepid near-term sales forecast that appears compounded by issues in the semiconductor supply chain.


Intel lifted its second-half revenue forecast to $73.5 billion, a $1 billion bump from its previous estimate, with modestly higher forecasts for free cash flow and adjusted earnings, but noted that gross margins will be lower than in part to rising costs linked to the rollout of its 7-nm chips and constraints in the global semiconductor supply chain.

Intel reported headline earnings of of $1.28 a share, up 12.3% from last year, on sales of $18.5 billion, up 2% from a year ago. Analysts surveyed by FactSet were expecting earnings of $1.07 a share on revenue of $17.8 billion.

The composition of its second quarter earnings also gave investors pause, with data center chip revenues -- which usually have a higher margin -- falling 9% to $6.5 billion. Personal computing division revenues were up 6% to $10.1 billion, a figure CEO Pat Gelsinger sees rising into 2022 as well, citing work-from-home demand, replacement cycles and rising penetration in schools and businesses.

'These trends underpin my belief that we are still in the early stages of a sustainable cycle of PC growth, and our OEM and channel partners have resoundingly affirmed this perspective. Beyond client, we are seeing near-term recovery across traditional data center market, as well as explosive long-term demand from the cloud to the intelligent edge,' Gelsinger told investors on a conference call late Thursday.

'On the other side of the equation, the strong demand environment continues to stress the supply chain,' he added. 'While I expect the shortages to bottom out in the second half, it will take another one to two years before the industry is able to completely catch up with demand.'

Intel shares were marked 5% lower in early trading Friday to change hands at $53.22 each, a move that would trim the stock's year-to-date gain to around 6.8%.

'We see additional gross margin headwinds as management has elected to not entirely pass through raw material cost increases, possibly to stall (Advanced Micro Devices ) share gains,' said Oppenheimer analyst Rick Schafer, who carries a market-perform rating on the stock.

'While we applaud aggressive measures taken by new management, we take a wait-and-see approach,' he added.

This article was originally published by TheStreet.