Intel Tops Forecasts, But Guides Margins Down

July 23, 2021

The chip maker reported earnings per share EPS of $1.28 (adjusted) with only $1.06 expected. That EPS represented a 12% year-over-year rise. As to revenue, Intel took in $18.5 billion (adjusted) with $17.8 billion expected. The revenue was up 2% year-over-year. Intel guided up for 2021 by $1 billion to $73.5 billion in adjusted revenue and full year earnings-per-share of $4.80.

But, Intel set expectations on non-GAAP gross margins of 55% in Q3, a drop from 59.2% in Q2.

"There’s never been a more exciting time to be in the semiconductor industry. The digitization of everything continues to accelerate, creating a vast growth opportunity for us and our customers across core and emerging business areas. With our scale and renewed focus on both innovation and execution, we are uniquely positioned to capitalize on this opportunity, which I believe is merely the beginning of what will be a decade of sustained growth across the industry,” said Pat Gelsinger, Intel CEO. “Our second-quarter results show that our momentum is building, our execution is improving, and customers continue to choose us for leadership products.”

Second-quarter revenue exceeded April guidance led by continued strength in Intel's Client Computing Group (CCG) and strong recovery in both Intel's Internet of Things Group (IOTG) and the Enterprise portion of its Data Center Group (DCG).

The PC and Mobileye businesses both achieved record Q2 revenue. In the second quarter, PC platform volumes were up 33 percent YoY and Mobileye closed 10 additional design wins for more than 16 million total lifetime units.

Business Highlights

▪ Announced a $3.5 billion investment to equip Intel’s New Mexico operations for the manufacturing of advanced semiconductor packaging technologies, including Foveros.

▪ Launched 12 new processors for client, including 11th Gen Intel Core with Intel® Iris® Xe graphics and Intel® Xeon® W-11000 series processors with more than 300 designs expected this year.

▪ Announced partnership with Microsoft including Intel Bridge Technology to deliver better mobile experiences on Windows-powered PCs.

▪ Leading cloud service providers, including Alibaba, Baidu, Microsoft, and Oracle are offering services based on the latest 3rd Gen Intel® Xeon® Scalable (“Ice Lake”) processors.

▪ Unveiled the Intel Network Platform and expanded networking leadership product portfolio with new FPGA, software, and Ethernet solutions.

▪ Announced partnership with Ericsson to expand cloud radio access network to increase 5G performance.

▪ Mobileye and ZF were selected by Toyota Motor Corp to develop advanced driver assistance systems.

▪ Announced Mobileye as the only company holding an autonomous vehicle testing permit in New York.

▪ Announced new organizational changes and welcomed renowned technologists to strengthen execution and innovation in critical business areas.

As part of its IDM 2.0 strategy, Intel is accelerating its annual cadence of innovation with new advancements in semiconductor process and packaging.

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