Intel shares tumble on downbeat earnings
Shares in chip giant Intel tumbled lower post-earnings after the company reported weaker than expected server CPU revenue and a 47% fall in government sales. Some of the key takeaways from the earnings report include:
- Third-quarter revenue of $18.33 billion - down 4% annually but slightly higher than the $18.24 billion expected.
- Earnings per share in-line with expectations.
- Fourth-quarter guidance of $17.40 billion against estimates of $17.38 billion.
Intel shares were down nearly 10% in after-hours trading, recording a loss of 18% overall this year. Most importantly for investors, however, is the weakness in the company's high growth sector 'server CPU' sales. Revenue dropped 7% annually due to a 47% fall in government sales after enjoying more than a 30% growth in the last few quarters.
Sales to cloud providers and communication providers rose 15% and 4% respectively. Intel's much-anticipated next-generation server CPU line 'Ice Lake Xeon' has been pushed back once again with volume shipments to be expected in the first quarter of 2021.
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