World News – US – Intel revenue drops 4% to $ 18 billion for Q3 2020 as competition intensifies


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Intel reported earnings matching Wall Street expectations in what was another tumultuous quarter for the global economy

For the third quarter ended Sept. 30, the large PC chipmaker posted non-GAAP earnings per share (EPS) of $ 1.11 a share on revenue of $ 18.3 billion, compared to non-GAAP EPS of $ 1 42 a share on income of $ 19 2 billion a year ago

CEO Bob Swan called the results « strong » and said they exceeded Intel’s own expectations « despite the impacts of the pandemic in significant parts of the business »

Shares of Intel are down 8% this year and the company’s market value at $ 229 billion remains lower than its biggest US rival, Nvidia, at $ 330 billion. Intel’s stock is down 10% to $ 48.30 per share in after-hours trading as a number of the company’s lines of business were weak Intel faces stiff competition from Nvidia in when it comes to AI and graphics chips, while Advanced Micro Devices is much more competitive in central processing units (CPUs)

Analysts expected Intel to report adjusted earnings of $ 111 per share, down from $ 1.442 share reported a year ago Revenue is expected to be $ 1824 billion, from $ 19 billion a year ago one year old

“Nine months after 2020, we are forecasting growth and another record year, even as we manage massive shifts in demand and economic uncertainty,” Swan said in a statement “We remain confident in our strategy and the long-term value we will create by delivering leading products and aim to gain share in a diverse market fueled by data and the rise of AI, 5G networks and advanced computing »

In July, Intel embarrassingly announced that its next-gen 7-nanometer manufacturing had been delayed.This prompted Intel to say it was considering outsourcing some of the manufacturing to a contracted chipmaker.

One of Intel’s advantages has been its in-house manufacturing with factories in the United States, but the company has twice stumbled now on the transitions to the new generations, allowing its competitors who use external manufacturer TSMC and others to make gains on Intel Intel will likely offer a manufacturing update in its call for results

And Intel announced this week that it will sell most of its flash memory business to SK Hynix for $ 9 billion Intel’s memory business has been mixed with losses over several years

“This is the first quarter where I see Covid-19 having a negative impact on the business,” said Patrick Moorhead, analyst at Moor Insights & Strategy “In addition, I think he has sold more than 10nm parts with a faster ramp that are more expensive to manufacture initially than 14nm parts Covid-19 appears to have impacted the mix as demand for PCs has shifted to low-margin [PC] education and demand from businesses / data centers appears to have dried up, replaced or weighed down by low margin cloud business I think [processor codename] Tiger Lake is great for thin and light laptops and I think it has a really good assortment coming up over the holidays

He added, “Looking at the longer term picture, I think CEO Bob Swan is focusing (AI, GPUS, network) and divesting (NAND, modems) in the right things in growing markets I don’t think Intel has to apologize for anything at this point Its stock is trading at 10 times earnings and looks cheap « 

Swan said the company is increasing its full-year revenue and profit forecast from its July forecast. He now expects 5% revenue growth in 2020, with an annual figure of $ 75 billion, while non-GAAP EPS will be $ 4.90 per share

To date, Intel has generated $ 25 billion in operating cash flow Among Intel groups, Mobileye grew 2% to $ 234 million, and the PC client group grew 1% to $ 9 billion per compared to a year ago But the other four Intel groups were down

The data center group fell back to $ 5.9 billion, down 7% from a year ago The Internet of Things group fell 33% to $ 677 million The memory group NSG was down 11% to $ 1.2 billion, and the programmable solutions group was down 19% to $ 411 million

Intel said continued strength in laptop sales was offset by headwinds from COVID-19 affecting parts of the business Cloud revenue increased 15% from a year ago with the demand to support work-from-home environments, but the weak economy affected business and government sales, which were down 47% after two quarters of 30% growth

The pandemic has also hurt the Internet of Things and memory groups Mobileye has returned to growth with the resumption of vehicle production Intel said more than 150 designs are in the works for new laptops equipped of Intel processors

For the fourth quarter, Intel expects non-GAAP earnings per share of $ 110 a share on income of $ 17.4 billion

Intel, Profits, NASDAQ: INTC, Stock, Data center

Global news – US – Intel revenue drops 4% to $ 183 billion for Q3 2020 as competition intensifies



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