CEO Pat Gelsinger has stated that Intel Corp. is currently performing better than the midpoint of its previous forecast for the third quarter. This optimistic announcement had a positive impact on Intel’s stock during Thursday afternoon trading.
Speaking at a Deutsche Bank conference, Gelsinger mentioned the robust state of the client business and the company’s revenue expectations of $12.9 billion to $13.9 billion. He expressed confidence in the company’s inventory levels and improved market share. Gelsinger also highlighted upcoming significant product releases and expressed contentment with the progress of Intel’s data center business, which aligned with their projections.
The possibility of revealing customer names
Despite an initial increase of 3% earlier in the session, Intel shares were up by 1.5% that afternoon. Gelsinger also discussed Intel’s foundry business, pointing out a substantial customer prepayment for their 18A process technology. He mentioned the possibility of revealing customer names and noted that this prepayment signifies strong confidence.
Gelsinger is hopeful that Intel’s foundry business could benefit from global supply chain diversification efforts, while also recognizing the potential of Intel’s advanced packaging technology during industry shortages. He emphasized that satisfying urgent needs could pave the way for stronger partnerships and significant growth in the foundry sector.
Having rebounded from its largest-ever loss three months ago, the company surpassed analyst predictions and returned to a profitable position as it disclosed its second-quarter earnings outcomes. This news prompted its stock to surge over 7% in after-hours trading.
Positive news to its investors
For the quarter, the company reported a net profit of $1.5 billion, with earnings of 13 cents per share before specific expenses. While revenue for the period experienced a 15% decrease from the previous year, amounting to $12.9 billion, the results outperformed expectations. Analysts had anticipated a loss of three cents per share on sales totaling just $12.13 billion.
Intel further delivered positive news to its investors by revealing its projections for the upcoming quarter. The company is aiming for earnings of 20 cents per share on revenue of $13.4 billion for the third quarter, surpassing the consensus estimate of 16 cents per share on $13.23 billion in sales.
On an adjusted basis, Intel’s gross margin nearly reached 40%, surpassing the company’s previous forecast of 37.5%. Investors are keen on observing an expansion of gross margins, even as the company makes substantial investments in manufacturing capabilities.
Although this marks the sixth consecutive quarter of declining sales for Intel, Chief Executive Pat Gelsinger remained optimistic, a sentiment he often expresses. Gelsinger noted that the results exceeded the higher end of the company’s guidance, attributing this to the significant momentum gained by its foundry business.