Although stocks dropped 10pc after Intel’s latest earnings report, the company is confident it will see another record-breaking financial year.
On Thursday (22 October), Intel published its earnings report for the third quarter of 2020. The company saw total revenue hit $18.3bn, which exceeded the expectations set out in July.
However, data-centric revenue was down by 10pc. In the company’s Data Centre Group, cloud revenue was up 15pc year on year due to continued demand from remote work operations, but the enterprise and government segment shrank by 47pc, which the company attributed to “a weaker economy due to Covid-19”.
Intel’s DCG revenue totalled $5.9bn in the quarter, which is below the expected $6.22bn, and is likely the reason why Intel shares were down 10pc in after-hours trading.
Intel’s Client Computing Group, which is the core business that sells PC chips, saw revenue grow by 1pc to $9.8bn, exceeding market expectations. This comes on the back of an increase in PC shipments as people shift to remote working and learning during the pandemic.
The company’s Non-Volatile Memory Solutions Group saw revenue hit $1.15bn. Intel announced earlier this week that it to sell off part of this division – the Nand memory and storage business – to SK Hynix in a $9bn deal.
Intel chief executive Bob Swan said that the company remains confident that it will see another record year despite any setbacks in the latest quarter. The business is looking for opportunities in a market fuelled by data and tech such as AI, 5G networks and edge computing.
“Our teams delivered solid third-quarter results that exceeded our expectations despite pandemic-related impacts in significant portions of the business,” Swan said. “Nine months into 2020, we’re forecasting growth and another record year, even as we manage through massive demand shifts and economic uncertainty.”
For the final quarter of the year, Intel is forecasting revenue of $17.4bn, with full-year revenue of $75.3m. The company’s annual earnings hit a record $72bn last year.