Intel has raised its full-year guidance after reporting lower but better-than-forecast revenues for the third quarter, driven by continued strength in notebook sales. Despite seeing a more modest fourth quarter on a sequential basis, CEO Bob Swan said he expects another record year, even amid the headwinds caused by the coronavirus pandemic and subsequent shifts in demand and surrounding economic uncertainty. “We remain confident in our strategy and the long-term value we’ll create as we deliver leadership products and aim to win share in a diversified market fueled by data and the rise of AI, 5G networks and edge computing,” the CEO said.
Revenues for the quarter slipped 4 percent from the year before to USD 18.3 billion and the gross margin declined to 53.1 percent from 58.9 percent. The operating profit went 22 percent lower to USD 5.1 billion while the net profit declined 29 percent to USD 4.3 billion, or USD 1.02 per share. The company said it generated USD 8.2 billion in cash from operations and paid USD 1.4 billion out in dividends. Intel has so far bought USD 17.6 billion worth of shares from its planned USD 20 billion share buyback programme.
Looking more closely at the company’s divisions, revenues at Intel’s main PC business went 1 percent higher to USD 9.8 billion. At the Data Center Group, revenues fell 7 percent to USD 5.9 billion, though cloud revenue increased 15 percent. At IoTG, revenues decreased 33 percent to USD 677 million while at Mobileye, they lifted 2 percent to USD 234 million.
Intel's third 10nm manufacturing facility, in Arizona, is now fully operational and the company now expects to ship 30 percent higher 10nm product volumes this year than its January expectations.
Looking ahead to the fourth quarter, Intel is guiding for lrevenues of USD 17.4 billion, an operating margin of 24.5 percent and EPS of USD 1.02.
For the full year, revenues are now seen at USD 75.3 billion, the operating margin at 29.5 percent, EPS at USD 4.55, cash from operations at USD 32.2-33 billion, and capex at USD 14.2-14.5 billion. The previous guidance had been for revenues of USD 75 billion, an operating margin of 30 percent and EPS at USD 4.53.
