Intel’s Q3 profit reached the target but weak data center performance plunged nearly 10% after the market | Anue Juheng


Intel (INTC-US) Thursday (23rd) announced that the third quarter of the fiscal year (ending 9/26) profit met expectations, but the data center business showed new signs of weakness, and the stock price fell more than 10% after the market.

Key financial report data

Based on GAAP

  • Adjusted EPS: annual reduction of 25% to 1.02 USD
  • Revenue: Decrease 4% annually to 18.3 billionUSD
  • Net profit: 4.3 billionUSD
  • Gross profit rate: 53.1%
  • Operating profit: 5.1 billionUSD

Based on Non-GAAP

  • Adjusted EPS: annual reduction of 22% to 1.11 USD vs. 1.11 USD (Consensus of Refinitiv survey)
  • Revenue: Decrease 4% annually to 18.33 billion yuanUSD vs. 18.25 billionUSD (Consensus of Refinitiv survey)
  • Net profit: 4.7 billionUSD
  • Gross profit margin: 54.8%
  • Operating profit: 5.4 billionUSD

Intel’s second-quarter revenue grew 20% annually, but its third-quarter revenue fell 4% annually. Intel’s operating profit margin dropped to 27.6% from 33.6% in the same period last year.

Business details

Customer Computing DepartmentIt is Intel’s largest business department, specializing in the production of chips for PCs, laptops, and tablets. Its revenue increased by 1% annually to 9.85 billionUSD, Higher than the 9.09 billion consensus of analysts surveyed by FactSetUSD

Earlier this month, technology research firm Gartner estimated that PC shipments in the third quarter increased by 3.6% due to purchasing demand from home offices and classes.

Data Center DepartmentSpecializing in the production of computer server chips, its revenue decreased by 7% annually to 5.91 billionUSD, Lower than the 6.21 billion consensus expected by analysts surveyed by FactSetUSD

The operating profit margin of the data center dropped from 49% to 32%.

Intel said that due to the COVID-19 pandemic, revenue from companies and governments after two consecutive quarters of growth of more than 30%, the third quarter fell by 47%, but cloud revenue grew 15%, the average sales price of the unit compared with the same period last year Decrease 15%.

Non-volatile memory chip solutions department, Which specializes in the production of memory chips and storage products, its revenue decreased by 11% annually to 1.15 billionUSD, Lower than the consensus estimate of 1.5 billion in the FactSet surveyUSD

South Korean memory manufacturer SK hynix announced on Tuesday that it will spend 9 billionUSDPurchased Intel NAND memory and storage business unit.

Fourth fiscal quarter financial forecast

Based on GAAP

  • Adjusted EPS: 1.02 USD
  • Revenue: 17.4 billionUSD
  • Operating profit margin: 24.5%

Based on Non-GAAP

  • Adjusted EPS: 1.10 USD vs. 1.07 USD (Consensus of Refinitiv survey)
  • Revenue: 17.4 billionUSD vs. 17.36 billionUSD (Consensus of Refinitiv survey)
  • Operating profit margin: 26.5%

The implied annual rate of revenue for Intel’s fourth-quarter estimates fell by 14%.

2020 All-Year Financial Survey

Based on GAAP

  • Adjusted EPS: 4.55 USD
  • Revenue: 75.3 billionUSD
  • Operating profit margin: 29.5%

Based on Non-GAAP

  • Adjusted EPS: 4.90 USD
  • Revenue: 75.3 billionUSD
  • Operating profit margin: 31.5%
Development in the third quarter

Intel executives revealed in July that Intel is evaluating to start relying on other companies to manufacture its chips. On Thursday, CEO Bob Swan said that Intel should be able to make a decision in January next year, and said that “it is increasingly confident in TSMC’s capabilities. “

Murthy Renduchintala, Intel’s director of engineering, resigns. Safroadu Yeboah-Amankwah, McKinsey’s senior director, joined as Chief Strategy Officer.

Excluding today’s after-hours trend, Intel has fallen by about 10% so far this year, while S&P 500 has risen by 7% over the same period.

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