Intel (INTC) Fourth Quarter 2020 Results

Intel shares rose more than 6% on Thursday, as the chipmaker reported profits and revenue above investor expectations and its own forecast on Thursday, thanks to strong PC sales.

Details of Intel’s earnings became available on financial cables minutes before markets closed on Thursday.

The strong earnings report covering the quarter ending last December is a critical time for the chip giant, as Thursday’s report is the last with Bob Swan as CEO. On February 15, Pat Gelsinger takes over.

Here’s how Intel did it:

• Earnings per share (EPS): $ 1.52, adjusted, versus $ 1.10 expected by Refinitiv consensus estimates.
• Returned: $ 20 billion, compared to $ 17.49 billion expected by consensus estimates from Refinitiv.
• Provide: Q1 2020 revenue of $ 18.6 billion and EPS of $ 1.03.

Intel also increased its cash dividend by 5% to $ 1.39 per share.

Intel said the strength of PC sales has helped it exceed its own expectations. He said 33% more PCs with Intel chips were sold compared to the same period last year. PC sales have been strong over the past year, with people working or attending school from home looking to upgrade their computers.

A leadership transition is not the only challenge Intel faces. In December, activist hedge fund Third Point urged Intel’s board of directors to make several changes to the company, including considering outsourcing chip production or divesting parts of the business, such as acquisitions.

Third Point CEO Dan Loeb also touched on Intel’s biggest problem in his December letter when he noted that Intel was lagging behind Asian chip foundries in terms of the ability to manufacture the processors. the most advanced.

Intel’s latest chips use a 14-nanometer process, as since 2013, while competing chips made by TSMC currently use a 5-nanometer process. A smaller process is better because more transistors can fit into the same chip, increasing power and efficiency.

Intel customers such as Apple, Amazon, and Microsoft have developed their own processors or have signaled their intention to do so.

Gelsinger, who was most recently CEO of VMWare, has a technical background and is expected to push Intel to become more competitive in terms of chip manufacturing. Intel said it started production of 10-nanometer chips in the quarter and will start manufacturing more this quarter.

Intel said that Mobileye, its self-driving car technology subsidiary, saw sales increase 39% in the quarter compared to the same period last year. But Mobileye is still a small part of Intel – in 2020 it reported $ 967 million in sales, versus Intel’s PC group, which reported $ 40.1 billion in sales during the year.