Intel CEO Lip-Bu Tan holds a wafer of Intel Core Ultra Series 3 (codename: Panther Lake) CPU tiles outside Intel’s Ocotillo campus in Chandler, Arizona. Panther Lake is the first client system-on-chip (SoC) built on the Intel 18A process node.
Provided by: Intel
intel reported better-than-expected earnings on Thursday, suggesting demand for its core x86 processors for PCs is recovering. Shares rose 6% in extended trading.
Intel’s Q3 earnings and LSEG consensus forecasts are as follows:
Revenue: $13.65 billion vs. estimated $13.14 billion EPS: 23 cents, adjusted, not comparable to analyst estimates
Intel posted a loss of 37 cents per share in the quarter, factoring in escrow shares released to the U.S. government as part of an $8.9 billion investment. The Trump administration entered into investment negotiations in August, purchasing 433.3 million shares at a price of $20.47 per share.
The company said it expects sales of $13.3 billion and adjusted earnings per share of 8 cents at the midpoint of the fourth quarter. Analysts had expected revenue of $13.37 billion and earnings of 8 cents per share. Intel said its outlook does not include the impact of the recent sale of its Altera subsidiary.
For the third quarter, Intel reported net income of $4.1 billion, or 90 cents per share. This compares to a net loss of $16.6 billion in the year-ago period. Intel said it received $5.7 billion from the U.S. government during the quarter.
“There is limited precedent for the accounting treatment of such transactions,” Intel warned investors in a press release.
Intel said it has met with the Securities and Exchange Commission to seek approval for its approach to accounting for government contributions, but has not yet received a response due to the shutdown. The company warned that it may revise its results in the future.
“We are committed to advancing the Trump administration’s vision to restore semiconductor production, and we proudly welcome the U.S. government as an essential partner in our efforts,” Tan told investors on an earnings call.
The company also received a $5 billion investment from a former rival. Nvidia In September. As part of the deal, the companies will integrate Intel’s central processors (CPUs) with Nvidia’s artificial intelligence graphics processors, which currently account for 90% of the AI chip market.
Intel said demand for its chips exceeds supply and it expects this trend to continue into next year.
The company announced product group sales of $12.7 billion, an increase of 3% on an annual basis. Of that, $8.5 billion came from its client computing group, which includes chips for PCs and laptops. Another $4.1 billion in sales came from data center CPUs, which was down 1% year over year. Intel said it hopes the deal with Nvidia will help restore growth in its data center CPU business.
Investors are watching the future of Intel Foundry, which makes chips not only for Intel but also for other companies. The division requires $100 billion in capital investment, but it has not yet won any major customers. Intel said it began producing cutting-edge chips in Arizona this quarter.
Intel’s foundry reported revenue of $4.2 billion in the quarter, which was down 2% on an annual basis. The company said all of the revenue comes from Intel’s use of the foundry to make chips.
The company said it had 88,400 employees, down from 124,100 in the same period last year.
Correction: An earlier version of this article had an incorrect number of employees.
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