Intel shares drop 4% as sales fall short of estimates

Chipmaker forecasts fourth quarter revenues above expectations

Intel’s headquarters in California: the chipmaker has its European base in Lexlip, Co Kildare. Photograph: David Paul Morris/Bloomberg

Intel’s headquarters in California: the chipmaker has its European base in Lexlip, Co Kildare. Photograph: David Paul Morris/Bloomberg

 

Shares in Intel fell by 4 per cent on Thursday as investors focused on the chipmaker missing estimates for third-quarter sales in its latest results. The drop came despite the tech giant saying it expected fourth-quarter revenue to come in above Wall Street expectations. It is betting on hybrid work demand by leveraging its in-house production capacity to weather supply chain challenges.

Intel is the biggest maker of central processor chips for both personal computers and servers used in data centres. To catch up with its rivals with faster chips, the company has been working to fix its manufacturing problems and also outsourcing some chips.

Intel expects fourth-quarter revenue of about $18.3 billion (€15.8 billion), compared with analysts’ average estimate of $18.25 billion, according to IBES data from Refinitiv. Adjusted sales for the third quarter stood at $18.1 billion, missing estimates of $18.24 billion.

Intel also said on Thursday that its chief financial officer George Davis would retire in May 2022.

Intel has its European headquarters in Leixlip, Co Kildare, where it made its first chip in 1993. It employs close to 5,000 people directly and a further 1,500 people indirectly at the site and earlier this year said it would create another 1,600 roles in a $7 billion expansion.

Investment

The tech giant also said in September that the Republic is in the running to land a major new multibillion-dollar Intel investment. Group chief executive Pat Gelsinger said at that stage that even if Ireland doesn’t secure the new investment, the State will gain from the company’s move to increase chip capacity in Europe generally.

Separately on Thursday, it emerged that Intel’s talks with US chip designer SiFive have ended without a deal. Talks between the two companies fell apart recently after they could not agree on financial terms and how the SiFive technology would be integrated into Intel’s chip making programme, sources said. – Reuters/Bloomberg