Intel’s Second Quarter Results Beat Expectations, But Warns Of Delay In Delivering Next-Generation Chips

Intel (INTC) posted better-than-expected second quarter earnings, but cautioned that its next-generation chips will be released later than it had originally planned.

The company reported earnings of $1.23 per share, adjusted (versus analysts’ expectations of $1.11 per share) on revenue of $19.73 billion (versus expectations of $18.55 billion).

“Amid a very challenging environment, cloud and network infrastructure and PC capabilities have been vital in allowing businesses and people to continue to work, learn, stay connected, and provide critical goods and services,” said CEO Bob Swan. “Those trends contributed to a very strong quarter.”

Swan added: “Our data-centric businesses grew 34% and drove approximately 52% of the company’s revenue, and our PC-centric business grew 7%.”

However, Intel issued disappointing guidance for the third quarter – anticipating earnings per share of $1.10 on an adjusted basis and $18.2 billion in revenue (compared with analysts’ expectations of $1.14 in adjusted earnings per share on $17.9 billion in revenue).

For the full year, Intel projects $4.85 in adjusted earnings per share and $75 billion in revenue (slightly above analysts’ expectations of $4.81 in adjusted earnings per share and revenue of $73.86 billion).

Intel also announced that it will have to delay the release of chips which carry tiny 7-nanometer transistors for higher performance after the company found a problem with the manufacturing process.

Intel now expects to make its first 7-nanometer chip deliveries in late 2022 or early 2023, CEO Swan said.

“We will continue to invest in our future process technology roadmap but we will be pragmatic and objective in deploying the process technology that delivers the most predictability and performance for our customers, whether that be on our process, external foundry process, or a combination of both,” Swan said.

Year-to-date Intel shares have been flat.