The shares of Intel Corp. weakened in Thursday's expanded session after the chipmaker's outlook barely surpassed the Wall Street consensus, while forecasting global chip shortages could persist well into 2023.
Shares fell more than 3% in the extended session after rising 3% in after-hours trading. At the end of the conference call with analysts, the share lost around 2%. The stock closed 0.5% during regular trading hours at $ 55.96.
For the third quarter, Intel projected revenue of approximately $ 19.1 billion, or $ 18.2 billion excluding the memory business, plus GAAP earnings of $ 1.08 per share and non-GAAP earnings from $ 1.10 per share. Analysts were expecting average adjusted earnings of $ 1.09 per share on revenue of $ 18.11 billion.
In the conference call, Intel CEO Pat Gelsinger told analysts that he expects the chip shortage to bottom out in the second half of the year, but that it will “take another one to two years before the industry can fully catch up with demand. ”
"The world needs more semiconductors," said Gelsinger. "The world needs a more balanced geographic supply chain for these semiconductors, and we are finding tremendous momentum and excitement for this strong support from customers, the ecosystem and governments around the world."
On Wednesday, Texas Instruments Inc.
opened earnings season for US chipmakers, beating Wall Street estimates, but confusing some analysts with a conservative forecast given a global semiconductor shortage. With chipmakers like Texas Instruments and Intel investing more in foundry capacity and ramping up production, investors don't want to see a repeat of 2018, when high chip demand quickly turned into a supply glut after customers bought double or triple chips as prices went up and chip makers continued to produce products.
Intel reported net income of $ 5.06 billion, or $ 1.24 per share, for the second quarter, compared to $ 5.11 billion or $ 1.19 per share for the same period last year. After accounting for acquisition-related charges and other items, Intel reported earnings of $ 1.28 per share compared to $ 1.23 per share last year.
Revenue declined from $ 19.73 billion in the year-ago quarter to $ 19.63 billion, a fourth straight quarter of year-over-year revenue declines, but surpassing its own estimates and those of analysts. Excluding the company's memory business, sales were $ 18.5 billion. Analysts had estimated adjusted earnings of $ 1.07 per share on sales of $ 17.81 billion, while Intel had adjusted earnings of $ 1.05 per share on sales of $ 18.9 billion $ 17.8 billion if the storage business to be divested was removed.
Read: The chip crisis continues, but one sector could provide some relief
Intel's data center group revenue fell 9% to $ 6.5 billion.
Intel reported that persistent storage solutions sales fell 34% to $ 1.1 billion, while Wall Street expected $ 690.8 million and Internet of Things [IoT] sales fell 47% $ 984 million increased compared to an expected $ 901.5 million. Mobileye's revenue rose 124% to $ 327 million, but The Street was expecting $ 361.4 million.
Read: Why Chip Stocks Fall Despite Semiconductor Shortages, Strong Early Gains
Regarding the rumors that Intel was planning to acquire GlobalFoundries, Gelsinger said he could not comment on the rumors and said he was "very happy with the expansion" of Intel's Foundry Services business, or IFS, but did not rule out acquisitions.
Regarding his expansion for foundry services, Gelsinger said that they had already spoken to "around 100 customers who talk to us about foundry opportunities".
"Our view is that the industry is very likely to consolidate," said Gelsinger. "The intense research and development, the need to move to modern and state-of-the-art hubs, the massive capital investment required – we just feel that smaller players just can't keep up and that foundries with no leading skills will be left behind." And we're always looking for it To speed up our plans with IFS. "
Regarding Intel's delay in its Sapphire Rapids chip, Gelsinger said the company had "allocated a little more time to the validation cycle" and that it was "in the hands of the customer" and that volume sampling was ongoing.
Over the past 12 months, Intel stock is down 8%. During the same period was the Dow Jones Industrial Average
– which counts Intel as a component – has increased 29%, the S&P 500 index
is up 33%, the tech-heavy Nasdaq Composite Index
up 40% and the PHLX Semiconductor Index
has increased by 55%.