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Intel Stocks Plummet Despite Its Strong Second Quarter Run

Intel Corporation’s stocks (INTC) were in red territories in the after-hours market and pre-market this Friday. The Silicon Valley giant held its earnings report yesterday and investors weren’t happy.

Other announcements greatly overshadowed the technology company’s earnings per share and revenue figures.

Yesterday, the semiconductor manufacturer said that it expects its 7-nanometer chips to be delayed by at least half a year. Unsurprisingly, the news wasn’t what its investors wanted to hear, especially considering that its rivals are already selling theirs.

Advance Micro Devices, or otherwise known as AMD, is Intel’s closest competition in the industry. Unfortunately for INTC investors, AMD has the upper hand in 7-nanometer chip production.

The company’s announcement yesterday has sent its rival AMD’s share prices rallying in the stock market’s pre-market.

Intel’s chief executive officer Bob Swan announced the negative news yesterday.

According to Swan, the company has identified a defect in its next-generation semiconductor technology. The issue with the 7-nanometer process would result in yield degradation.

Swan assured that the company has already root-caused the problem, adding that there’s no fundamental roadblocks for the production. As a precaution, the company invested in contingency plans that would tackle uncertainties ahead.

Reports say that the contingency plans may include using “somebody else’s foundry”, as Swan stated.

The first shipments of the 7-nanometer CPU products are expected to come in by late 2022 or early 2023. Meanwhile, the data-center products should come out in the first six months of 2023.

An analyst said that the stall would be costly for Intel, as many other products relied on it.

Second Quarter Performance

INTC shares might underperform in the stock trading today, although it’s still undeniable that the company had an impressive Q2 run.

Yesterday, the semiconductor manufacturer announced that it generated 19.73 billion US dollars in total revenue. The results came in significantly higher than earlier projections of 18.53 US dollars.

The 2020 second-quarter revenue represents a 20% growth from the 16.51 billion US dollars from the same quarter a year ago.

Aside from that, Intel’s second quarter earnings per share reached 1.23 US dollars. Experts were impressed, as it also crushed prior estimates of about 1.11 US dollars.

The company tried to highlight the strong demand for its server and computer chips amidst the ongoing pandemic.

As for the third quarter, the company expects its EPS to come in at 1.10 US dollars per share. This is while revenue estimates are around 18.2 billion US dollars.

For the full-year guidance, the tech giant reinstated its guidance of 75 billion US dollars in revenue. And its adjusted earnings per share estimates are at 4.85 US dollars.

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