Pat Gelsinger, CEO of Intel, speaks in Santa Monica, California on March 9, 2017, in a photo taken when he was CEO of VMware.
Patrick T. Fallon | Bloomberg | Getty Images
Intel’s sales were broadly unchanged and earnings declined in the first quarter of 2021 in CEO Pat Gelsinger’s first quarterly report at the helm.
Intel’s earnings per share were significantly higher than analysts’ estimates and the company’s forecasts, but Intel’s stock was down slightly in extended trading. Sales were also higher than analysts’ estimates.
Here’s how Intel did it against Refinitiv’s consensus estimates:
- Earnings per share (EPS): $ 1.39 compared to $ 1.15 (adjusted) expected, down 1% yoy
- Income: $ 18.57 billion vs. Expected $ 17.90 billion (adjusted), stable year-over-year
For Intel’s fiscal second quarter, revenue is expected to be $ 17.8 billion, slightly above analysts’ expectations of $ 17.55 billion. Intel missed analyst estimates for its second-quarter EPS as analysts expected $ 1.09 and Intel is leading at $ 1.05 as it spends to build additional manufacturing capacity.
Gelsinger, which took over in February, announced earlier this month that Intel would invest $ 20 billion in new microchip manufacturing facilities and announced a plan to become a contract chip maker, or foundry, which would other company’s chip product, in addition to its own chips.
“This is a pivotal year for Intel,” Gelsinger said in a statement.
But that plan will take years to complete. In the quarter ending March, Intel’s quarterly sales and quarterly earnings were broadly unchanged from the same period last year, even as demand for microchips skyrocketed worldwide.
PC sales had the best quarter of recent years in the first quarter, according to several estimates. PC sales pushed the chip maker: Intel said sales of portable laptop chips were a record for the company, having increased 54% year-over-year and that total PC volumes increased by 38%. % in the quarter.
In the quarter a year ago, Intel reported sales of $ 9.78 billion in its Client Computing group, which includes PC chips compared to $ 10.61 billion in the most recent quarter. The group accounted for over 59% of Intel’s revenue.
However, many of these laptops and desktops are low-cost Chromebooks that use less expensive chips. Apple, an Intel customer, is also increasingly using its own chips, instead of Intel, for its line of Mac PCs.
Intel also sells high-performance data center chips, and sales increased last year as companies ramped up their cloud operations while employees worked from home. A year ago, Intel reported $ 6.99 billion in revenue in its Data Center group compared to $ 5.56 billion this quarter.
Mobileye, Intel’s subsidiary for self-driving vehicles, reported revenue of $ 377 million, up 48% year-over-year.
Intel has seen setbacks in the making of its most advanced chips, which use a manufacturing process called 7 nanometers. It also faces increased competition from companies like Nvidia, which announced its data center chip this year, and AMD, which boasted that it outperformed Intel in some key compute performance metrics.
Gelsinger’s plan to become a foundry and increase production in the United States will not be cheap. Intel said it plans to spend between $ 19 and $ 20 billion on capital expenditures in 2021.
Earlier this month, Intel said it expected earnings of $ 4 per share and revenue of $ 76.5 billion for the full year of 2021. Intel raised that stance Thursday to a $ 4.60 gain. per share, but lowered its sales forecast to $ 72.5 billion.