Intel shares slip as data-center miss overcomes earnings beat, outlook boost
- Written by MarketWatch
- Published in Economics
Intel Corp. shares slipped in the extended session Thursday after the chip giant’s total earnings, revenue and a boosted outlook topped Wall Street estimates, but quarterly revenue growth at its fastest-growing segment came in below the analyst consensus.
Intel INTC, -0.51%[1] shares, which had been down about 3% after hours before the earnings conference call began, were down 4% during the call. On the regular session, shares finished down 0.5% to close at $52.16. Shares are up 13% for the year, compared with a 3.3% gain the Dow Jones Industrial Average DJIA, +0.44%[2] , a 6.1% gain in the S&P 500 index SPX, -0.30%[3] and a 13.7% gain in the tech-heavy Nasdaq Composite Index COMP, -1.01%[4] .
Bob Swan, Intel’s chief financial officer and interim chief executive, headed Intel’s presentation of results following the sudden departure of former CEO Brian Krzanich in June[5].
“While there is no timetable, the board is working with a sense of urgency and the identification of candidates, both internal and external, is well underway,” Swan said of the search for a permanent CEO.
Shares dropped under pressure after hours as the chip maker fell short of Wall Street targets when it came to data-center sales, despite broader strong results. Intel reported a 27% gain in data-center revenue from a year ago to $5.5 billion, while analysts, on average, were looking for $5.61 billion.
On the call, Swan said he expects data-centric growth to be about 20% for the year, up from Intel’s April guidance of high-teen growth, which now puts it in-line with the Wall Street average. Analysts surveyed by FactSet, on average, expect full-year data-center revenue of $22.83 billion, or an increase of 19.8% from 2017.
“Product innovation, a strong global economy and U.S. tax reform are stirring CIO investment in IT infrastructure, leading to higher data center demand and a stronger PC [total addressable market],” Swan said.
Intel reported second-quarter net income of $5.01 billion, or $1.05 a share, compared with $2.81 billion, or 58 cents a share, in the year-ago period. Adjusted earnings were $1.04 a share. Intel on average was expected to post adjusted earnings of 97 cents a share, according to analysts surveyed by FactSet, and $1 a share from Estimize, a software platform that uses crowdsourcing...
