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Intel shares have climbed 12.3% this year amid a global chip shortage.
Pawel Mazur / Dream time
The crippling chip shortage hampering the global economy will get worse before it gets better,
Intelligence
Chief Executive Pat Gelsinger said Thursday evening during the company’s earnings call. The CEO maintained that the crisis could last until 2023.
“We remain in a very constrained environment where we are unable to fully support demand,” said Gelsinger. Intel CEO joins other chipmakers such as
Semiconductor manufacturing in Taiwan
(ticker: TSM) who said the shortages would last well beyond this year.
Shares of Intel (INTC) fell more than 2.6% to $ 54.51 during extended trading after the close of regular session with a decline of 0.5%.
Expectations from Intel and other chip companies are high heading into the second quarter due to the global semiconductor shortage. As the global demand for semiconductors that power consumer goods ranging from computers to home appliances and cars has increased, companies are expected to reap the benefits. Investors expect large chip companies to easily beat analyst estimates and issue bullish forecasts for the future as appetite for chips continues unabated.
Intel exceeded profit and revenue expectations. The chipmaker reported second quarter net profit of $ 5.1 billion, which is $ 1.24 per share compared to the same net income, but $ 1.19 per share in profits, there is a year. Revenue fell to $ 19.6 billion from $ 19.7 billion a year ago.
Adjusted for acquisition costs, among others, earnings were $ 1.28 per share. Excluding Intel’s memory business it sold last year, the company reported second-quarter revenue growth of 2% to $ 18.5 billion. The company previously forecast adjusted earnings of $ 1.05 per share and revenue of $ 17.8 billion, excluding memory activity.
Analysts had estimated adjusted earnings of $ 1.07 per share on revenues of $ 17.8 billion.
Intel’s Mobileye autonomous driving unit continues to be a bright spot, as the company reported revenue more than doubled to $ 327 million, far outpacing other Intel businesses. The company increased personal computer revenue 6% to $ 10.1 billion, but its data center segment fell 9% to $ 6.5 billion. Gelsinger said Intel expects its data center revenue to return to year-over-year growth in the remaining two quarters in 2021.
For the third quarter, Intel told investors it expected adjusted earnings of $ 1.10 per share on revenue of about $ 18.2 billion, excluding memory business. On a conference call, Gelsinger said increasing the company’s production using new manufacturing technology could weigh on profits in the third quarter. Typically, manufacturing the more advanced chips becomes significantly more cost effective as companies refine the process.
Gelsinger said the company raised its outlook for the full year to adjusted earnings per share of about $ 4.80 and revenue of $ 73.5 billion, excluding memory business. Gelsinger also said the company’s research and development costs will increase during the year.
Analysts were forecasting adjusted third-quarter earnings of $ 1.08 per share, on revenue of $ 18.3 billion. For the full year, the consensus estimate was earnings of $ 4.51 per share and revenue of $ 73.6 billion.
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