Stock pops higher as both PC, data-center businesses exceed expectations
A previous version of this article included an inaccurate number for Intel’s second-quarter profit forecast. It has been updated.
Intel Corp. shares surged in the extended session Thursday, swinging from an initial loss after the chip maker topped Wall Street estimates for the quarter, and Chief Executive Pat Gelsinger assured analysts that the company’s data-center business was improving.
Intel Corporation reported better-than-expected quarterly earnings, thanks in part to improved performance in the data-center business division. The computer chip company said it earned $1.22 per share, compared to the $1.20 per share expected by analysts.
Revenue for the quarter was $18.56 billion, up from $15.78 billion from last year, and slightly higher than the $18.41 billion analysts had predicted. The company was able to beat estimates despite a challenging macroeconomic environment.
Intel CEO Brian Krzanich said in a statement that the company’s data-center business was improving.
“Our third quarter results demonstrate the transformation of our business as growth in data-centric markets more than offset slower legacy PC demand,” Krzanich said.
Intel’s data-center group posted $5.2 billion in revenue, up 4 percent from last year, while the PC group earned $8.3 billion, down 3 percent when compared with the same period the year prior.
Krzanich added that the company was “investing aggressively in attractive opportunities that fuel our future growth,” and that the company is “very focused on our 10nm process and product ramp.”
Intel also announced that it is expecting fourth-quarter revenues of $17.1 billion, slightly below Wall Street’s estimates of $17.2 billion, but still indicative of Intel’s continued success despite the economic uncertainty.
The company’s strong performance has been credited to its focus on data-centric markets. The data-center business, in particular, is thriving due to increased demand for networks and cloud services. Intel’s strategy of investing and innovating in new technology is paying off, and the company is in a good position to weather any economic downturn.