Intel shares drop sharply despite mostly solid earnings report
Shares of Intel fell as much 10% in after-hours trading Thursday — after the company posted quarterly revenue and earnings generally in line with expectations.
Why it matters: The chip giant is a bellwether for the PC industry, and small signs of weakness may be playing an outsize role in spooking investors.
Between the lines: The stock drop came after Intel reported third-quarter revenue from its data center unit of $5.9 billion, down from the prior-year period and some 5% below analyst expectations, per CNBC.
- The company has also been struggling to get its next-generation manufacturing efforts up and running.
- Intel stock was trading at $48.55 as of 4:45 p.m. ET, down $5.35, or more than 10%, from the closing-bell price before the earnings report.
By the numbers: Overall revenue came in just ahead of expectations, while bottom-line earnings were basically in line with, or ahead of, Wall Street consensus. In the third quarter, Intel notched:
- Revenue of $18.3 billion, down 4% year-over-year but above Intel's prior guidance for the quarter.
- Per-share earnings of $1.11, down 22% year-over-year but above prior guidance.
Of note: Intel said strong sales of notebook computers helped offset negative pandemic-related impacts on its sales to large businesses and government customers.
Meanwhile: The company announced earlier this week it is selling its flash memory unit to Korea's SK Hynix for $9 billion.
What they're saying: "Our teams delivered solid third-quarter results that exceeded our expectations despite pandemic-related impacts in significant portions of the business,” CEO Bob Swan said in a statement.